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How old will you be when you can retire?
Comments
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DC pensions are funded by the individual (and often his employer). If they are not funded then the individual does not have a pension. The only person who is impacted is the individual himself, unlike with DB pensions where underfunding/underperformance impacts the taxpayer (Public sector) or the individual's employer (Private sector). If the employer is impacted, it often means that they have to invest into the DB pension at the expense of investing into their business, impacting jobs.
It's not rockets science, Griz.
Probably why you get that bit.
They were rhetorical questions.
Moons ago DB pensions were all the rage for those that had pensions. this was part of the overall employment package.
The ability to fund those pensions has been reduced for several reasons including dividend growth for shareholders.
The cunning wheeze was to move to DC to put the onus and risk on the employee and reduce costs and obligations for the employer.
Conditions of employment continue to be eroded and the amount needed to fund DC pensions to make any meaningful impact on future pension outcomes is beyond many. Many people are simply moving into other investments with no certainty of outcome and certainly no ring fenced future pot.
So we have moved from "generous" pensions on one hand gradually whittling away at them until for many the their investment will mean little at the end on the other. How long before tax relief on pension contributions is attacked? How long before more individuals simply can't provide sufficient to make a material difference.
The cost to the taxpayer, of public sector pensions, has been progressively tackled through reduced benefits, higher employee contribution, longer qualifying/retirement periods and significant privatisation leading to cessation of rights and poorer conditions.
As I said before pensions aren't the problem merely a symptom.
Would you be so bothered if you had the benefit of a DB scheme?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Probably why you get that bit.
They were rhetorical questions.
Moons ago DB pensions were all the rage for those that had pensions. this was part of the overall employment package.
The ability to fund those pensions has been reduced for several reasons including dividend growth for shareholders.
The cunning wheeze was to move to DC to put the onus and risk on the employee and reduce costs and obligations for the employer.
Conditions of employment continue to be eroded and the amount needed to fund DC pensions to make any meaningful impact on future pension outcomes is beyond many. Many people are simply moving into other investments with no certainty of outcome and certainly no ring fenced future pot.
So we have moved from "generous" pensions on one hand gradually whittling away at them until for many the their investment will mean little at the end on the other. How long before tax relief on pension contributions is attacked? How long before more individuals simply can't provide sufficient to make a material difference.
The cost to the taxpayer, of public sector pensions, has been progressively tackled through reduced benefits, higher employee contribution, longer qualifying/retirement periods and significant privatisation leading to cessation of rights and poorer conditions.
As I said before pensions aren't the problem merely a symptom.
Would you be so bothered if you had the benefit of a DB scheme?
Goodness me, What a lot of waffle.
I have the benefit of a DB scheme and I've always been bothered.0 -
vivatifosi wrote: ȣ2k would not be the result of a lifetime putting into a private sector pension either.
It would be for anyone putting in as little as public sector employees do!it's just a shames that it is taking so bloody long to get there.
Agreed.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
If pension funds boost productive investment more than the other vehicles then that is a very strong case for pension funds.
Blimey, progress!
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.
They use a spread of investments but are required to tend towards the lower risk end of the spectrum. However, the government isn't forced to sell gilts, and could simply live within its means instead, which is something that I would greatly prefer.To what extend pension pots are invested in industry or government debt I really don't know.
Typically 80% equities and 20% other with the latter being government bonds, corporate bonds, and property. Of course, this split depends on age and ability to handle volatility. I currently have close to zero exposure to gilts.However all (pension) payments to economically inactive people is a charge to the then economically active lot.
Yes, but in the case of funded pensions, it's mostly repayment of capital and payment for use of productivity boosting assets.
In the case of unfunded pensions, it's a burden, pure and simple.
BTW, my projections show me paying more in tax during retirement than I'll get in state pension, so anyone who calls me economically inactive will receive a poke in the eye,I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Goodness me, What a lot of waffle.
I have the benefit of a DB scheme and I've always been bothered.
Bothered with what - yourself."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Bothered with what - yourself.
Ah, you've capitulated and reverted to pathetic comments. I was wondering when that would happen (again).0 -
gadgetmind wrote: »Blimey, progress!
They use a spread of investments but are required to tend towards the lower risk end of the spectrum. However, the government isn't forced to sell gilts, and could simply live within its means instead, which is something that I would greatly prefer.
Typically 80% equities and 20% other with the latter being government bonds, corporate bonds, and property. Of course, this split depends on age and ability to handle volatility. I currently have close to zero exposure to gilts.
Yes, but in the case of funded pensions, it's mostly repayment of capital and payment for use of productivity boosting assets.
In the case of unfunded pensions, it's a burden, pure and simple.
BTW, my projections show me paying more in tax during retirement than I'll get in state pension, so anyone who calls me economically inactive will receive a poke in the eye,
you have rather avoided the important issues
1. you have provided no evidence that shows that pension money significantly funds new capital goods creation or indeed that it is necessary at all.
2. whether or not you would prefer the government to have zero debt whilst interesting, is not the current situation.
Annuities 'invested' in government debt mean the repayments are funded by taxpayer EXACTLY in the same way as unfunded government pensions are.
That is, people paying into pensions in say 2013 and withdrawing in 2033, will have funded 2013 government spending and people in 2033 will be funding the pension payment just like unfunded state/public sector schemes.
3. Buying stock and shares has little to do with 'investing' in industry and does not help create new industries or help others to expand or create new capital goods.
It merely transfers ownership unless investment is in new start-ups or company bonds.
In any event, the payout arise from the profits of those companies when the payout occur and so are funded by the economically active at that time so are as much a 'burden' on the people of the future as tax payments. They receive lower gross salaries as a result of the need of companies to pay profits to pension funds (their owners).
4. Whether or not you wish to carry out violence, I would recommend you put 'economically inactive' into a search engine (or read an economics text book) and discover the normal accepted meaning of the term.
Your paying tax is simply a transfer payments and like government transfer payments (JSA, pensions etc) do not of themselves create goods or services although they do indirect stimulate them.
A pensioners is as economically active as a person on JSA.0 -
1. you have provided no evidence that shows that pension money significantly funds new capital goods creation or indeed that it is necessary at all.
It's significant but I'm not sure that it's necessary nor sufficient. However, it's adding to the flow into such good causes, which is surely a good thing.whether or not you would prefer the government to have zero debt whilst interesting, is not the current situation.
True, but a move towards funded pensions will help future generations by easily the government debt burden, which another good thing.Annuities 'invested' in government debt mean the repayments are funded by taxpayer EXACTLY in the same way as unfunded government pensions are.
No they aren't. Funded pensions lend money to the government so that said government can cover unfunded pensions. If the government didn't need the money to cover this, the funded pensions could invest elsewhere.That is, people paying into pensions in say 2013 and withdrawing in 2033, will have funded 2013 government spending and people in 2033 will be funding the pension payment just like unfunded state/public sector schemes.
I think I've already explained why that view is wrong.Buying stock and shares has little to do with 'investing' in industry and does not help create new industries or help others to expand or create new capital goods.
Yes it does. Companies need to issue new shares and bonds to fund expansions. If you have trouble understanding this, I suggest you spend a few years running a FTSE listed company that's in an expansion phase.Whether or not you wish to carry out violence, I would recommend you put 'economically inactive' into a search engine (or read an economics text book) and discover the normal accepted meaning of the term.
Define it how you want, if I'm paying my way, then I'm paying my way.
(And yes, I have read economics text books but find them shallow and the whole subject bereft of predictive power, and thus rather pointless.)A pensioners is as economically active as a person on JSA.
Some, not all.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »It's significant but I'm not sure that it's necessary nor sufficient. However, it's adding to the flow into such good causes, which is surely a good thing.
True, but a move towards funded pensions will help future generations by easily the government debt burden, which another good thing.
No they aren't. Funded pensions lend money to the government so that said government can cover unfunded pensions. If the government didn't need the money to cover this, the funded pensions could invest elsewhere.
I think I've already explained why that view is wrong.
Yes it does. Companies need to issue new shares and bonds to fund expansions. If you have trouble understanding this, I suggest you spend a few years running a FTSE listed company that's in an expansion phase.
Define it how you want, if I'm paying my way, then I'm paying my way.
(And yes, I have read economics text books but find them shallow and the whole subject bereft of predictive power, and thus rather pointless.)
Some, not all.
We have had a good outing and we are never going to agree.
We at least, having made adequate provision for the future, can both enjoy a happy christmas and prosperous new year.0 -
We have had a good outing and we are never going to agree.
I like to think I can comprehend most points of view, but claims that saving for your own future and expecting future generations to cover your blank cheque amount to the same thing does leave me perplexed. If this is my fault, then I apologise.We at least, having made adequate provision for the future, can both enjoy a happy christmas and prosperous new year.
I wish all of this and more to those who truly have made such provision rather than having just kicked the can down the road.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
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