How goverments piled costs onto pensions during the good times

Thrugelmir

hugheskevi wrote: »

There were a lot of changes around 2006 affecting most schemes.

1997 was a few years earlier I think you'll find.

Civil Service Pension scheme of which I'm now fortunate to be a member of. Is something that many in the private sector can only dream of, even now.

hyubh

Thrugelmir wrote: »

There was no attempt to curtail public sector pensions either.

Huh? All the big ones were revised, and in the case of the 2006 police and firefighter schemes for new entrants, in favour of versions signicantly cheaper than their predecessors. (Still expensive obviously. But the 'old' police and fire schemes are something else...)

Thrugelmir wrote: »

Civil Service Pension scheme of which I'm now fortunate to be a member of. Is something that many in the private sector can only dream of, even now.

For sure, but civil service pensions were historically non-contributory final salary...

jamesd

Bootsox wrote: »

There is one man, and one man only, to blame for trashing the final salary pension and that is Gordon Brown.

Maybe nobody told you that it was tax relief for a tax that was abolished two years later?

The story you pointed to is one containing extracts from a book designed to sell the book.

It's not even a particularly good extract, claiming that the Boots scheme was "one of the first to act" when it didn't act until after the tax itself had been abolished, then sold shares during the depths of a market downturn to buy government bonds during a highish price time for them. The result was missing out on the boom market that followed and would have saved the scheme a fortune. It's a spectacularly bad example of over-reaction and poor market timing and the person who did it left soon afterwards.

hyubh

taking_stock wrote: »

that just made me laugh out loud - like an article in the daily mail makes a sensible reference point!!

Funnily enough, while once it got to the actual election the Daily Mail's line was as partisan in favour of the blues against the reds and yellows as normal, while he was PM the paper had lots of pro-Brown stories (the editor got on with him personally, and didn't like the look of Cameron).

Thrugelmir

hyubh wrote: »

Huh? All the big ones were revised, and in the case of the 2006 police and firefighter schemes for new entrants,

My reference is to the changes in 1997. Your response is like a politicians. Avoid the real question.

The nature of the damage caused by the changes in 1997 are undisputed in terms of the impact on pension savings. Not the place to widen the debate to the other implications of the policy and waste of the money raised by the measure.

hyubh

Thrugelmir wrote: »

My reference is to the changes in 1997. Your response is like a politicians. Avoid the real question.

What are you talking about? I was referring to your claim that the previous government made 'no attempt to curtail public sector pensions', a statement that is plainly false.

The nature of the damage caused by the changes in 1997 are undisputed in terms of the impact on pension savings.

Er, they clearly are disputed - indeed, they've been disputed in this very thread.

jamesd

Thrugelmir wrote: »

The nature of the damage caused by the changes in 1997 are undisputed in terms of the impact on pension savings.

Do you really think that withdrawing a tax relief for just two years before the whole tax was abolished killed defined benefit pensions?

Thrugelmir

jamesd wrote: »

Do you really think that withdrawing a tax relief for just two years before the whole tax was abolished killed defined benefit pensions?

Did you read my earlier post ?

I along with a huge number of other people at the time weren't companies.

In answer to your question. Most certainly has had an impact. As my DC scheme of which I am member closed some years ago to new members (1999). Even now remains underfunded. Despite the scheme trustees making annual top ups. Many in DC's aren't so fortunate that my old employers feel obliged to do so. Even though the business was sold many years ago.

Bootsox

taking_stock wrote: »

that just made me laugh out loud - like an article in the daily mail makes a sensible reference point!!

I presume your big reference work is the Daily Mirror?

jamesd

Thrugelmir wrote: »

Did you read my earlier post ?

Yes. You appeared to be referring to the abolition of relief for ACT in 1997. ACT was abolished for everyone from 1999.

Thrugelmir wrote: »

In answer to your question. Most certainly has had an impact. As my DC scheme of which I am member closed some years ago to new members (1999).

For that scheme it is entirely possible that the decision to close it was made after the change and before ACT was eliminated. But it's not conceivable that ACT relief was the only reason for it, there had been many other changes before that, as well as increases in life expectancy that were making it more costly.

Thrugelmir wrote: »

Even now remains underfunded. Despite the scheme trustees making annual top ups. Many in DC's aren't so fortunate that my old employers feel obliged to do so. Even though the business was sold many years ago.

That situation of underfunding is likely to continue so long as life expectancies continue to increase. The business itself may have limited choice since the Pension Protection Fund is not shy when it comes to seeking to confiscate assets related to schemes that are about to enter the PPF.