What now for Final Salary, Defined Benefit and Public Sector pensions?

Tom2023

Yesterdays changes were just for Defined Contribution pensions but they have opened up a whole new can of worms for Final Salary, Defined Benefit and Public Sector pensions.

Why shouldn't people in funded Final Salary or Defined benefit schemes have the same opportunities as people in Defined Contribution schemes?

The real problem is with Ponzi scheme Public Sector Pensions. The government, local councils, police forces simply do not have the readies to give people their entire pot.

And what about those unfortunate enough to be in schemes that have deficits?

I don't think Can of Worms quite does this situation justice.

chucknorris

Tom2023 wrote: »

Yesterdays changes were just for Defined Contribution pensions but they have opened up a whole new can of worms for Final Salary, Defined Benefit and Public Sector pensions.

Why shouldn't people in funded Final Salary or Defined benefit schemes have the same opportunities as people in Defined Contribution schemes?

The real problem is with Ponzi scheme Public Sector Pensions. The government, local councils, police forces simply do not have the readies to give people their entire pot.

And what about those unfortunate enough to be in schemes that have deficits?

I don't think Can of Worms quite does this situation justice.

I can't believe that you would rather have been paying into a DC scheme instead?

Triumph13

Speaking as a taxpayer I will be delighted if this leads to swathes of public sector employees opting fo a DC scheme instead. The govt should set one up immediately 'just to give ps workers more choice'

dunstonh

Why shouldn't people in funded Final Salary or Defined benefit schemes have the same opportunities as people in Defined Contribution schemes?

Because they are very different schemes and defined benefit schemes offer so much more for the money people pay into them.

The real problem is with Ponzi scheme Public Sector Pensions. The government, local councils, police forces simply do not have the readies to give people their entire pot.

Why would anyone want the transfer value? The defined benefits are worth far more in 95% of cases. People that think DC is better than DB are wrong.

rpc

Perhaps, just maybe, those in defined benefit scheme will get the benefit that is defined in the Scheme Rules?

This argument is like buying a bag of apples and then complaining that you can't make orange juice.

Tom2023

dunstonh wrote: »

Why would anyone want the transfer value? The defined benefits are worth far more in 95% of cases. People that think DC is better than DB are wrong.

Say your family had a history of dying young?

Personally I'd like my entire Final Salary pot. I could then invest it and pass it on to my children.

Truthseeker_2

Tom2023 wrote: »

Yesterdays changes were just for Defined Contribution pensions but they have opened up a whole new can of worms for Final Salary, Defined Benefit and Public Sector pensions.

Why shouldn't people in funded Final Salary or Defined benefit schemes have the same opportunities as people in Defined Contribution schemes?

The real problem is with Ponzi scheme Public Sector Pensions. The government, local councils, police forces simply do not have the readies to give people their entire pot.

And what about those unfortunate enough to be in schemes that have deficits?

I don't think Can of Worms quite does this situation justice.

It's not a can of worms at all. Defined benefit schemes are completely different because they rely on a notional pot of money, not a real one. In effect, the beneficiaries are still paid a 'salary' from their employers, and this pseudo-salary is the defined benefit pension. Pension pots are irrelevant in this case.

Reue

Tom2023 wrote: »

Say your family had a history of dying young?

Personally I'd like my entire Final Salary pot. I could then invest it and pass it on to my children.

Could you not then refuse your company's DB scheme and instead put money into your own private pension?

Truthseeker_2

Tom2023 wrote: »

Say your family had a history of dying young?

Personally I'd like my entire Final Salary pot. I could then invest it and pass it on to my children.

There is no 'pot' in a defined benefit scheme!

kidmugsy

It would not be difficult to introduce a sort of "virtual" DC scheme for govt employees, whereby taxpayers don't actually have to find most of the cash until someone retires, but meantime he could manage the investment of his virtual ETFs and so on. And perhaps real gilts, if govt is looking for new buyers of those.

chucknorris

Tom2023 wrote: »

Yesterdays changes were just for Defined Contribution pensions but they have opened up a whole new can of worms for Final Salary, Defined Benefit and Public Sector pensions.

Why shouldn't people in funded Final Salary or Defined benefit schemes have the same opportunities as people in Defined Contribution schemes?

The real problem is with Ponzi scheme Public Sector Pensions. The government, local councils, police forces simply do not have the readies to give people their entire pot.

And what about those unfortunate enough to be in schemes that have deficits?

I don't think Can of Worms quite does this situation justice.

There isn't anything to stop you investing in a DC/SIPP scheme, if I work until my state pension age I anticipate having a DB pension of about £17k (in the TPS) and a SIPP/PP of about £350k.