How old will you be when you can retire?

MFW_ASAP

AndyGuil wrote: »

Closed to new people joining, not to people already in them.

Many close to new members as a precursor to closing the scheme for everyone. The logic being that "I'm all right Jack" will stop employees striking when a pension closes to new members, then wait a few years until you have a good enough body of new employees who won't strike against the complete closure of a pension they are not entitled to. Divide and conquer.

gadgetmind

N1AK wrote: »

Public sector pensions should be roughly comparable to private sector ones.

Yup.

You lob in some of your salary (25% is about right, but anything down to 0% if the employee is particularly thick), a few bob from employer., lob it all into investments, and no-one has any unfunded future liability.

What's not to like?

grizzly1911

MFW_ASAP wrote: »

STRAWMAN ALERT!!!

No one is saying that 'senior nurses and health professionals don't deserve a pension'. LOL at you raising such an emotive employee grouping. The issue is how generous these pensions are, whether they are fully funded and whether the employee package (including pension) is similar to a comparable job in the private sector.



/QUOTE]



Actually you brought that group in not me. I don't believe in Strawmen.

Why did you choose that particular public servant?

You high lighted the figures why?

As coastline has pointed out there have been two downgrades in mainstream NHS penisionn recently. I am sure there will be more to come along, with further pay freezes, reduced working terms and conditions, for the foreseeable future reducing the eventual cost in real terms.

Many NHS clinical staff (not doctors) have seen pay freezes for something like the last 5 years already with additional pension contributions impacting on take home pay.

Are they generous? No doubt they are better than some and worse than others. The same as the private sector where different groups have different arrangements Advocating poor pension arrangements for all seems a somewhat retrograde step. The fact that private pensions have been hijacked by government and shafted by employers isn't really the current incumbents fault.


Public/private - divide and conquer.

Loughton_Monkey

CLAPTON wrote: »

......Most government debt is owed to UK citizens (70% I think) who would happily lend more if indexed linked and UK has no problem borrowing money abroad on relatively low fixed rates over 10 or more years.

Was 35% overseas in 2011.

The vast bulk of the rest of UK debt is owned by pension funds. So technically not owed to UK citizens directly, but ultimately on our behalf.

CLAPTON

Loughton_Monkey wrote: »

Was 35% overseas in 2011.

The vast bulk of the rest of UK debt is owned by pension funds. So technically not owed to UK citizens directly, but ultimately on our behalf.

thanks for that update

so when those funded pension schemes pay out, much of the money will come from the government i.e. the taxpayers of the future.

thanks for pointing that out.

Loughton_Monkey

CLAPTON wrote: »

thanks for that update

so when those funded pension schemes pay out, much of the money will come from the government i.e. the taxpayers of the future.

thanks for pointing that out.

I think I've pointed out that this is not strictly correct.

First of all, the funded pension schemes will not [usually] have much or any in Gilts whilst it is being funded. What you then find is that the government needs to borrow. It would hardly borrow if it had the cash. It needs cash for the civil service pay bill for example. It is 'happy' - or indeed obligated to pay 2½% otherwise government would cease to function.

Can you just imagine a world without funded schemes, and calculate (a) how much extra, per pensioner, the taxpayer would have to find, from revenue, to pay housing benefit and extra top ups to all? And (b) where, oh where, would they find the money to borrow if not from massive pension investments. [Not to mention where industry would get funding from if none of us saved or bought shares/Corporate bonds]

Upon crystalisation, the pension fund therefore steps in to help the government by supplying the extra liquidity, at market rate. It is, in fact, creating extra GDP of 2½% of all such gilt buying.

Over time, the pensioner receives his/her money back, plus a bit of interest, less a few charges (even more GDP created).

So your assertion of "much of" the money is at best a gross exaggeration. At worst, plain wrong.

Try mooting the idea to the Treasury that they shouldn't sell their Gilts to pension funds. See what reaction you get.

Imagine if no pension funds existed to buy Corporate Bonds or Rights Issues, Shares in new flotations..... Float that one at the CBI. Every single penny of such (UK) investment is GDP as spending on clothes or potatoes would have been.

Why would you wish to turn away all this investment?

CLAPTON

Loughton_Monkey wrote: »

I think I've pointed out that this is not strictly correct.

First of all, the funded pension schemes will not [usually] have much or any in Gilts whilst it is being funded. What you then find is that the government needs to borrow. It would hardly borrow if it had the cash. It needs cash for the civil service pay bill for example. It is 'happy' - or indeed obligated to pay 2½% otherwise government would cease to function.

Can you just imagine a world without funded schemes, and calculate (a) how much extra, per pensioner, the taxpayer would have to find, from revenue, to pay housing benefit and extra top ups to all? And (b) where, oh where, would they find the money to borrow if not from massive pension investments. [Not to mention where industry would get funding from if none of us saved or bought shares/Corporate bonds]

Upon crystalisation, the pension fund therefore steps in to help the government by supplying the extra liquidity, at market rate. It is, in fact, creating extra GDP of 2½% of all such gilt buying.

Over time, the pensioner receives his/her money back, plus a bit of interest, less a few charges (even more GDP created).

So your assertion of "much of" the money is at best a gross exaggeration. At worst, plain wrong.

Try mooting the idea to the Treasury that they shouldn't sell their Gilts to pension funds. See what reaction you get.

Imagine if no pension funds existed to buy Corporate Bonds or Rights Issues, Shares in new flotations..... Float that one at the CBI. Every single penny of such (UK) investment is GDP as spending on clothes or potatoes would have been.

Why would you wish to turn away all this investment?

If in 2013, a person pays into their pension fund which then lends to the government, the government uses that money for current spending (thus reducing the need to raise money in taxes).

if in 2033 the person retires and starts taking their pension, the money has to come from the government (taxpayer) via the pension fund.

So the pension is paid by the taxpayers of 2033.

Exactly like a non funded pension fund.

In fact this is equally true for pension funds 'invested' in private sector companies although the precise mechanisms are slightly different.


This matches exactly the picture when you consider the production of goods and services in 2033 and you consider the consumption of goods and services in 2013 as of course it must as they are but different ways of looking at the same issue.

vivatifosi

MFW_ASAP wrote: »

"A local government middle manager who retires on £60,000 a year can expect a pension of £30,000 a year. And the lower paid? A more junior worker at a council who retires on £25,000 a year can expect a pension of £12,500 a year. These are based on 30 year careers, too. You can add more to these figures if someone spends their entire working life in the public sector.

I am in the LGPS and my pension is career average not final salary. From next April, my co-workers in fs will also move to ca and the age at which people,retire will be raised in line with the state pension age, so if people want to retire at 65 but their pension age for state pension is, say, 67, then they will receive less money.

I'd a l so suggest that someone on £60k would not be a middle manager in a council that has been restructured. To put things in perspective, the head of libraries would earn around that figure, and have hundreds of staff underneath them, most of whom would be library assistants, earning a maximum of about £17k in many LAs. Yes, the LGPS is a good pension scheme, but the majority of pensioners retire with relatively modest pensions.

N1AK wrote: »

I know of two examples of private final salary schemes being ended for current members as well. You got what you were entitled to up to that point and any new contributions would be to a different scheme. I've only worked for two firms so it can't be that uncommon.

I know as a trustee that this is very common. Most switch to defined contribution, some such as Tesco switched to career average. Also, for many firms, their schemes closed to new members so long ago, maybe 15 years or more, that their membership in a fs scheme is absolutely miniscule compared to workforce size.

gadgetmind

CLAPTON wrote: »

Exactly like a non funded pension fund.

The crucial different is that any DC scheme does *not* create a fixed, and potentially unaffordable, future liability.

In fact this is equally true for pension funds 'invested' in private sector companies although the precise mechanisms are slightly different.

By "equally true" I think you mean "even less true". Money put into equities is invested in key infrastructure, productive factories, new technologies, and such like.

Money lent to the government is blown almost immediately on vote winning social "projects" that usually fail to achieve even their stated goals.

CLAPTON

gadgetmind wrote: »

The crucial different is that any DC scheme does *not* create a fixed, and potentially unaffordable, future liability.

By "equally true" I think you mean "even less true". Money put into equities is invested in key infrastructure, productive factories, new technologies, and such like.

Money lent to the government is blown almost immediately on vote winning social "projects" that usually fail to achieve even their stated goals.

Both DC and DF create future liabilities from the people who will be working in the future.

This is because all goods and services consumed at any given time are produced by the economically active people at that time.

So today, if you work then you (and other economically active people) are supporting the young, the old, the sick, the layabouts, the unemployed and of course yourself. This happens irrespective of whether they have a stash of cash under the bed, a funded pension scheme or an unfunded one.

You use, of course, the 'capital' goods that have been built up in the past.

In the future, when you retire, you will be supported by the economically active at that time.

This will happened whether there is a funded pot or an unfunded pot and whether it's private of public.

The actual cash flow will be different but is all cases the food, the clothes, the medical services etc. will be provided by the economically active people at that time.
The share each person gets will depend upon how much cash they have available but that doesn't directly determine how much is produced.

Current production can be either consumed or can be used to create capital goods (i.e. invested in the real sense of the word).
Simply buying shares in BP doesn't create any capital goods and is not different to lending it to the government.

The relationship between real investment and people's 'saving' is somewhat opaque. It's an interest question whether the production of 'capital' goods would be any different if there were no funded pension funds at all.

The government loves private pension schemes because it pushes spending from tax to reducing the gross income of the economically active indirectly but the government don't get blamed.