How old will you be when you can retire?

gadgetmind

vivatifosi wrote: »

Yes, the LGPS is a good pension scheme, but the majority of pensioners retire with relatively modest pensions.

Do you have statistics to back this up?

I understand that the average private pension pot on retirement is worth around £30k, so a relatively modest income of around £2k per annum on top of state pension.

How relatively modest is the average LGPS pension compared to a relatively modest £2k pa?

MFW_ASAP

grizzly1911 wrote: »

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.

The strawman was the fact you were claiming that I didn't think "senior nurses and health professionals on £40K [should] get a pension? perhaps you think they don't deserve one?"

I reiterate, no one is saying this. 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.

The main problem I have is that they are rarely fully funded. This puts a burden on future taxpayers, who will already have their hands full with student loan payments, high mortgages, supporting state pensions, raising families and hopefully saving for their own retirement.

With unfunded final defined benefit pensions, the government is effectively deferring the pay of public sector workers onto the next generation of tax payers. Some of these taxpayers will not have been born when the public sector worker was actually working and providing a service.

vivatifosi

gadgetmind wrote: »

Do you have statistics to back this up?

I understand that the average private pension pot on retirement is worth around £30k, so a relatively modest income of around £2k per annum on top of state pension.

How relatively modest is the average LGPS pension compared to a relatively modest £2k pa?

I've heard that where I am a typical pension was £4k pa, so yes, double £2k, but hardly untold riches. Plus that is before the change to career average.

I will try and get some more figs later when I have my laptop, but at the moment am on tablet so downloading docs and reading is more difficult.

gadgetmind

CLAPTON wrote: »

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

Yes, but in the DC case this liability is funded via real investments made now into productive assets, and the payout depends on how this pans out rather than being a guaranteed figure.

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

Yes, but the level of that support depends on how productive my investments are at that time. If I've invested in plant and technology that makes future people more productive, then I do well.

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

No not really, there is very little in common between investing now with a hope of benefiting in future versus blowing the lot now but demanding a certain future lifestyle.

The government loves private pension schemes because it pushes spending from tax to reducing the gross income of the economically active

Private pension schemes are very likely to boost the income of future economically active people and at the same time reduce their tax burden.

Without past investment into private companies by equity and bond holders, would we have had agricultural, industrial and technical revolutions? Have these made people more economically productive?

gadgetmind

vivatifosi wrote: »

I've heard that where I am a typical pension was £4k pa, so yes, double £2k, but hardly untold riches. Plus that is before the change to career average.

Is the £4kpa a typical figure for someone who's spent their working life in the scheme? The £30k pot I quoted was for *all* private pensions during working life, so we need to compare like for like.

grizzly1911

MFW_ASAP wrote: »

The strawman was the fact you were claiming that I didn't think "senior nurses and health professionals on £40K [should] get a pension? perhaps you think they don't deserve one?"

I reiterate, no one is saying this. 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.

The main problem I have is that they are rarely fully funded. This puts a burden on future taxpayers, who will already have their hands full with student loan payments, high mortgages, supporting state pensions, raising families and hopefully saving for their own retirement.

With unfunded final defined benefit pensions, the government is effectively deferring the pay of public sector workers onto the next generation of tax payers. Some of these taxpayers will not have been born when the public sector worker was actually working and providing a service.

Governments of all persuasions defer the true costs of many inniatives pensions are just one of those costs.

They could fund them in advance but that merely increases debt today that will need to be serviced tomorrow.

Privatisation (and private sector outsourcing) has only made savings by and large by erroding pay and benefits of the workforce. It may not happen on day one because of TUPE but it will be engineered swiftly thereafter. The pension liabilities are usually retained by the old employer.

Reducing future pension payments for all is only adding to future funding problems for society as a whole whilst reducing consumption now, through increased contributions, as well. Benefit costs will increase and taxation will fall. Both could be altered to reduce the shortfall but only demonstrates we are in decline.

Pensions aren't the problem they are a symptom.

grizzly1911

gadgetmind wrote: »

Is the £4kpa a typical figure for someone who's spent their working life in the scheme? The £30k pot I quoted was for *all* private pensions during working life, so we need to compare like for like.

Will public sector schemes be skewed by higher average workforce salaries and near full enrolment?

What is the spread of private sector pensions?

vivatifosi

gadgetmind wrote: »

Is the £4kpa a typical figure for someone who's spent their working life in the scheme? The £30k pot I quoted was for *all* private pensions during working life, so we need to compare like for like.

No, it would be for a typical pension. However, I would argue - and as a trustee of a fs scheme in the private sector I am reasonably up on this - that £2k would not be the result of a lifetime putting into a private sector pension either.

The reality is that many people have not made pension provisions across their working lives and that's the biggest reason for poor returns... to get something back you have got to have put something in in the first place.

Imo the move to career average schemes and floating retirement dates in line with state equivalent makes sense for public schemes. Equally it makes sense for private sector workers to have a right to access a pension with an employer contribution. Similarly it makes sense that that people have to opt out and that they are forced to think about their futures, it's just a shames that it is taking so bloody long to get there.

Loughton_Monkey

gadgetmind wrote: »

Yes, but in the DC case this liability is funded via real investments made now into productive assets, and the payout depends on how this pans out rather than being a guaranteed figure.

Yes, but the level of that support depends on how productive my investments are at that time. If I've invested in plant and technology that makes future people more productive, then I do well.

No not really, there is very in common between investing now with a hope of benefiting in future versus blowing the lot now but demanding a certain future lifestyle.

Private pension schemes are very likely to boost the income of future economically active people and at the same time reduce their tax burden.

Without past investment into private companies by equity and bond holders, would we have had agricultural, industrial and technical revolutions? Have these made people more economically productive?

I think we're flogging a dead horse with claptrap.

You and I can live well in retirement with our funded schemes, happy in the knowledge that we boosted the "Investment" part of GDP rather than the "Consumption" component of GDP.

He can live in retirement by "spending GDP" [as he puts it.]

CLAPTON

gadgetmind wrote: »

Yes, but in the DC case this liability is funded via real investments made now into productive assets, and the payout depends on how this pans out rather than being a guaranteed figure.

Yes, but the level of that support depends on how productive my investments are at that time. If I've invested in plant and technology that makes future people more productive, then I do well.

No not really, there is very in common between investing now with a hope of benefiting in future versus blowing the lot now but demanding a certain future lifestyle.

Private pension schemes are very likely to boost the income of future economically active people and at the same time reduce their tax burden.

Without past investment into private companies by equity and bond holders, would we have had agricultural, industrial and technical revolutions? Have these made people more economically productive?

All useful real investment has the potential to boost future productivity and hence production of goods and services.
This is so whether it arising from government borrowing to fund X-rail, new roads, new schools etc
or arises from retained profits by companies
or arise from borrowing from people who save (either directly or via banks, mutual funds, pension funds).


If pension funds boost productive investment more than the other vehicles then that is a very strong case for pension funds.
On the other hand if pension funds are cautious in their investment choices then they may reduce the useful investment that would otherwise occur.

Currently I know of no evidence either way.

In any event, whether of not the totality of the 'investment' are productive, the eventual payouts will come from people working in the future via taxation or enhanced company profits or from their savings (non consumption) at that future time (of course using the accumulated capital goods).

As far as I know the majority of annuity funds (the vast majority of paying private pensions) are 'invested' in government debt so are funded directly by taxpayers.
The funded state schemes similarly are funded by taxpayers.

To what extend pension pots are invested in industry or government debt I really don't know.

I make no judgement as to whether funded or unfunded schemes are 'good' or 'bad' or whether the total amount of capital goods creation is better one way or the other;

However all (pension) payments to economically inactive people is a charge to the then economically active lot.