Government notice period for private pension rules

GunJack

Silvertabby said:

tacpot12 said:

HappyHarry is correct, but it is very unlikely that they would make any changes that would badly affect anyone approaching retirement at short notice. I think that Labour have learned the lessons from the Waspi ( Women Against State Pension Inequality) campaign and the event that triggered it.  

17 years between the 1993 Budget announcement that State pension ages were being re-equalised and 2010, when the incremental increases began.

Or 15 years from the well-publicised 1995 Pensions Act.

...and another 20-ish years back for the Equality act....

ali_bear

It takes time to update legislation and for the pensions industry to update their many systems, terms and conditions. Put down the Telegraph, have a cup of tea and think about it a bit more. 

Amazing how many people still refer to the newly elected government as "Labour". Even the BBC are doing it. 

DBdoobydoo

Peter999_2 said:

shortseller09 said:

Peter999_2 said:

se that I shouldn't have posted political things.  I thought that it was very relevant but what do I know.

Not relevant and utterly wrong, do some reading.

Haha.  Don't think it's me who need to do the reading.     Why don't you have a look at what happened when Gordon Brown made the disasterous pension dividend changes in 1997 - or do you just think it's a co-incidence that so many companies no longer offer them?    

But, if you want to keep your head in the sand that is also fine, I won't waste my time responding further.

I think it's more that employees in general don't appreciate the value of DB pensions so employers have been able to get away without providing this benefit so maximising company profits.

The LGPS provides a model  for sustainable DB pensions but at a cost of 30% employer contributuons & 5-5-12.5% employee contributions. Private employers aren't prepared to do this & the lack of interest in pensions by employees allows this to continue.

zagfles

DBdoobydoo said:

Peter999_2 said:

shortseller09 said:

Peter999_2 said:

se that I shouldn't have posted political things.  I thought that it was very relevant but what do I know.

Not relevant and utterly wrong, do some reading.

Haha.  Don't think it's me who need to do the reading.     Why don't you have a look at what happened when Gordon Brown made the disasterous pension dividend changes in 1997 - or do you just think it's a co-incidence that so many companies no longer offer them?    

But, if you want to keep your head in the sand that is also fine, I won't waste my time responding further.

I think it's more that employees in general don't appreciate the value of DB pensions so employers have been able to get away without providing this benefit so maximising company profits.

The LGPS provides a model  for sustainable DB pensions but at a cost of 30% employer contributuons & 5-5-12.5% employee contributions. Private employers aren't prepared to do this & the lack of interest in pensions by employees allows this to continue.

It's not just cost it's risk. The narrative of greedy employers trying to maximise profits at the expense of the downtrodden worker who doesn't understand pensions and won't join a union is tempting but doesn't reflect reality. It's not like DB pensions were a hard fought for benefit by workers. They were a tool companies used to create loyalty and act as almost golden handcuffs. 

Prior to about 1988, employers could force employees to join the DB pension scheme. Most did. Then the govt changed the rules to allow people to opt out, and we had to go to meetings with HR where they practically begged us to stay in the pension scheme! This was a 1/60th final salary DB scheme. There were logical reasons to opt out, eg for someone in their 20's who envisaged moving jobs in a few years. Deferred DB pension with no/limited inflation protection for several decades could end up worthless. 

Then the govt gradually piled extra costs on DB schemes to fix some of their deficiencies. Such as inflation protection, PPF costs, rules to stop dipping (Maxwell etc). Plus changes in the investment environment, dividend reclaim rules, life expectancy etc. All massively increased the cost of providing a benefit which previously employers wanted to provide, not for the workers' benefit, but their own. 

The last Labour govt even attempted to water down inflation protection for DB pensions in around 2009 in a last ditch desperate attempt to stop them all closing. It didn't work of course, too little too late. 

DB pensions of course remain in the public sector, but when risk is underwritten by the taxpayer, it's not a real risk. Perhaps if the govt had underwritten all private sector schemes instead of creating the PPF and imposing a levy then more private sector DB schemes would remain. 

Sarahspangles

I read some odd statements about public sector DB pensions. Most of my career has been spent in the sector and colleagues in the professional groups I’ve worked in have been very clear that our remuneration is salary plus pension. When I and others have been headhunted - so clearly we’re employable - the private sector salary offer has been significantly higher to reflect that the pension isn’t as good. Recently, the private sector has been able to offer salary sacrifice as a ‘perk’. Some have declined the offers, some have made the jump. That’s just how the job market works. Successive governments have had to make decisions about public pay to ensure public services like the NHS don’t collapse.

It’s not unfair for some people to have DB pensions. Just as it’s not unfair for some to retire from the private sector with great DC pots. Both groups made good decisions during their working lives. 

DBdoobydoo

zagfles said:

DBdoobydoo said:

Peter999_2 said:

shortseller09 said:

Peter999_2 said:

se that I shouldn't have posted political things.  I thought that it was very relevant but what do I know.

Not relevant and utterly wrong, do some reading.

Haha.  Don't think it's me who need to do the reading.     Why don't you have a look at what happened when Gordon Brown made the disasterous pension dividend changes in 1997 - or do you just think it's a co-incidence that so many companies no longer offer them?    

But, if you want to keep your head in the sand that is also fine, I won't waste my time responding further.

I think it's more that employees in general don't appreciate the value of DB pensions so employers have been able to get away without providing this benefit so maximising company profits.

The LGPS provides a model  for sustainable DB pensions but at a cost of 30% employer contributuons & 5-5-12.5% employee contributions. Private employers aren't prepared to do this & the lack of interest in pensions by employees allows this to continue.

It's not just cost it's risk. The narrative of greedy employers trying to maximise profits at the expense of the downtrodden worker who doesn't understand pensions and won't join a union is tempting but doesn't reflect reality. It's not like DB pensions were a hard fought for benefit by workers. They were a tool companies used to create loyalty and act as almost golden handcuffs. 

Prior to about 1988, employers could force employees to join the DB pension scheme. Most did. Then the govt changed the rules to allow people to opt out, and we had to go to meetings with HR where they practically begged us to stay in the pension scheme! This was a 1/60th final salary DB scheme. There were logical reasons to opt out, eg for someone in their 20's who envisaged moving jobs in a few years. Deferred DB pension with no/limited inflation protection for several decades could end up worthless. 

Then the govt gradually piled extra costs on DB schemes to fix some of their deficiencies. Such as inflation protection, PPF costs, rules to stop dipping (Maxwell etc). Plus changes in the investment environment, dividend reclaim rules, life expectancy etc. All massively increased the cost of providing a benefit which previously employers wanted to provide, not for the workers' benefit, but their own. 

The last Labour govt even attempted to water down inflation protection for DB pensions in around 2009 in a last ditch desperate attempt to stop them all closing. It didn't work of course, too little too late. 

DB pensions of course remain in the public sector, but when risk is underwritten by the taxpayer, it's not a real risk. Perhaps if the govt had underwritten all private sector schemes instead of creating the PPF and imposing a levy then more private sector DB schemes would remain. 

That's why I gave the example of the LGPS which mirrors other public sector pension schemes but is fully funded & not underwritten by the taxpayer.

DBdoobydoo

Sarahspangles said:

I read some odd statements about public sector DB pensions. Most of my career has been spent in the sector and colleagues in the professional groups I’ve worked in have been very clear that our remuneration is salary plus pension. When I and others have been headhunted - so clearly we’re employable - the private sector salary offer has been significantly higher to reflect that the pension isn’t as good. Recently, the private sector has been able to offer salary sacrifice as a ‘perk’. Some have declined the offers, some have made the jump. That’s just how the job market works. Successive governments have had to make decisions about public pay to ensure public services like the NHS don’t collapse.

It’s not unfair for some people to have DB pensions. Just as it’s not unfair for some to retire from the private sector with great DC pots. Both groups made good decisions during their working lives. 

The government is the de facto monoploy employer for some sectors e.g. most healthcare professionals thus it's only fair that the NHS operate as a model employer & provide best in class pensions. Ideally a decent DB pension is what every employee should receive whether public or private sector as it provides certainty in retirement.

zagfles

DBdoobydoo said:

zagfles said:

DBdoobydoo said:

Peter999_2 said:

shortseller09 said:

Peter999_2 said:

se that I shouldn't have posted political things.  I thought that it was very relevant but what do I know.

Not relevant and utterly wrong, do some reading.

Haha.  Don't think it's me who need to do the reading.     Why don't you have a look at what happened when Gordon Brown made the disasterous pension dividend changes in 1997 - or do you just think it's a co-incidence that so many companies no longer offer them?    

But, if you want to keep your head in the sand that is also fine, I won't waste my time responding further.

I think it's more that employees in general don't appreciate the value of DB pensions so employers have been able to get away without providing this benefit so maximising company profits.

The LGPS provides a model  for sustainable DB pensions but at a cost of 30% employer contributuons & 5-5-12.5% employee contributions. Private employers aren't prepared to do this & the lack of interest in pensions by employees allows this to continue.

It's not just cost it's risk. The narrative of greedy employers trying to maximise profits at the expense of the downtrodden worker who doesn't understand pensions and won't join a union is tempting but doesn't reflect reality. It's not like DB pensions were a hard fought for benefit by workers. They were a tool companies used to create loyalty and act as almost golden handcuffs. 

Prior to about 1988, employers could force employees to join the DB pension scheme. Most did. Then the govt changed the rules to allow people to opt out, and we had to go to meetings with HR where they practically begged us to stay in the pension scheme! This was a 1/60th final salary DB scheme. There were logical reasons to opt out, eg for someone in their 20's who envisaged moving jobs in a few years. Deferred DB pension with no/limited inflation protection for several decades could end up worthless. 

Then the govt gradually piled extra costs on DB schemes to fix some of their deficiencies. Such as inflation protection, PPF costs, rules to stop dipping (Maxwell etc). Plus changes in the investment environment, dividend reclaim rules, life expectancy etc. All massively increased the cost of providing a benefit which previously employers wanted to provide, not for the workers' benefit, but their own. 

The last Labour govt even attempted to water down inflation protection for DB pensions in around 2009 in a last ditch desperate attempt to stop them all closing. It didn't work of course, too little too late. 

DB pensions of course remain in the public sector, but when risk is underwritten by the taxpayer, it's not a real risk. Perhaps if the govt had underwritten all private sector schemes instead of creating the PPF and imposing a levy then more private sector DB schemes would remain. 

That's why I gave the example of the LGPS which mirrors other public sector pension schemes but is fully funded & not underwritten by the taxpayer.

The LGPS might be fully funded, but it's underwritten by the taxpayer. That's why they don't pay the PPF levy, like all private schemes have to whether or not they're fully funded. LGPS don't need the "insurance" of the PPF, the taxpayer provides that. If the LGPS funds ever weren't enough to pay benefits they'd be bailed out by the taxpayer, probably through an increase on employer contribution (ie mainly local govt, ie the taxpayer).

hyubh

zagfles said:

DBdoobydoo said:

zagfles said:

DBdoobydoo said:

Peter999_2 said:

shortseller09 said:

Peter999_2 said:

se that I shouldn't have posted political things.  I thought that it was very relevant but what do I know.

Not relevant and utterly wrong, do some reading.

Haha.  Don't think it's me who need to do the reading.     Why don't you have a look at what happened when Gordon Brown made the disasterous pension dividend changes in 1997 - or do you just think it's a co-incidence that so many companies no longer offer them?    

But, if you want to keep your head in the sand that is also fine, I won't waste my time responding further.

I think it's more that employees in general don't appreciate the value of DB pensions so employers have been able to get away without providing this benefit so maximising company profits.

The LGPS provides a model  for sustainable DB pensions but at a cost of 30% employer contributuons & 5-5-12.5% employee contributions. Private employers aren't prepared to do this & the lack of interest in pensions by employees allows this to continue.

It's not just cost it's risk. The narrative of greedy employers trying to maximise profits at the expense of the downtrodden worker who doesn't understand pensions and won't join a union is tempting but doesn't reflect reality. It's not like DB pensions were a hard fought for benefit by workers. They were a tool companies used to create loyalty and act as almost golden handcuffs. 

Prior to about 1988, employers could force employees to join the DB pension scheme. Most did. Then the govt changed the rules to allow people to opt out, and we had to go to meetings with HR where they practically begged us to stay in the pension scheme! This was a 1/60th final salary DB scheme. There were logical reasons to opt out, eg for someone in their 20's who envisaged moving jobs in a few years. Deferred DB pension with no/limited inflation protection for several decades could end up worthless. 

Then the govt gradually piled extra costs on DB schemes to fix some of their deficiencies. Such as inflation protection, PPF costs, rules to stop dipping (Maxwell etc). Plus changes in the investment environment, dividend reclaim rules, life expectancy etc. All massively increased the cost of providing a benefit which previously employers wanted to provide, not for the workers' benefit, but their own. 

The last Labour govt even attempted to water down inflation protection for DB pensions in around 2009 in a last ditch desperate attempt to stop them all closing. It didn't work of course, too little too late. 

DB pensions of course remain in the public sector, but when risk is underwritten by the taxpayer, it's not a real risk. Perhaps if the govt had underwritten all private sector schemes instead of creating the PPF and imposing a levy then more private sector DB schemes would remain. 

That's why I gave the example of the LGPS which mirrors other public sector pension schemes but is fully funded & not underwritten by the taxpayer.

The LGPS might be fully funded, but it's underwritten by the taxpayer. That's why they don't pay the PPF levy, like all private schemes have to whether or not they're fully funded. LGPS don't need the "insurance" of the PPF, the taxpayer provides that. If the LGPS funds ever weren't enough to pay benefits they'd be bailed out by the taxpayer, probably through an increase on employer contribution (ie mainly local govt, ie the taxpayer).

Indeed. While the precise situation is a bit murky vis-a-vis admission bodies (until relatively recently, there was even one LGPS fund that had no public sector employers and did a buy in...), the scheme is literally backed by the (council) tax payer...

hugheskevi

zagfles said:

DBdoobydoo said:

zagfles said:

DBdoobydoo said:

Peter999_2 said:

shortseller09 said:

Peter999_2 said:

se that I shouldn't have posted political things.  I thought that it was very relevant but what do I know.

Not relevant and utterly wrong, do some reading.

Haha.  Don't think it's me who need to do the reading.     Why don't you have a look at what happened when Gordon Brown made the disasterous pension dividend changes in 1997 - or do you just think it's a co-incidence that so many companies no longer offer them?    

But, if you want to keep your head in the sand that is also fine, I won't waste my time responding further.

I think it's more that employees in general don't appreciate the value of DB pensions so employers have been able to get away without providing this benefit so maximising company profits.

The LGPS provides a model  for sustainable DB pensions but at a cost of 30% employer contributuons & 5-5-12.5% employee contributions. Private employers aren't prepared to do this & the lack of interest in pensions by employees allows this to continue.

It's not just cost it's risk. The narrative of greedy employers trying to maximise profits at the expense of the downtrodden worker who doesn't understand pensions and won't join a union is tempting but doesn't reflect reality. It's not like DB pensions were a hard fought for benefit by workers. They were a tool companies used to create loyalty and act as almost golden handcuffs. 

Prior to about 1988, employers could force employees to join the DB pension scheme. Most did. Then the govt changed the rules to allow people to opt out, and we had to go to meetings with HR where they practically begged us to stay in the pension scheme! This was a 1/60th final salary DB scheme. There were logical reasons to opt out, eg for someone in their 20's who envisaged moving jobs in a few years. Deferred DB pension with no/limited inflation protection for several decades could end up worthless. 

Then the govt gradually piled extra costs on DB schemes to fix some of their deficiencies. Such as inflation protection, PPF costs, rules to stop dipping (Maxwell etc). Plus changes in the investment environment, dividend reclaim rules, life expectancy etc. All massively increased the cost of providing a benefit which previously employers wanted to provide, not for the workers' benefit, but their own. 

The last Labour govt even attempted to water down inflation protection for DB pensions in around 2009 in a last ditch desperate attempt to stop them all closing. It didn't work of course, too little too late. 

DB pensions of course remain in the public sector, but when risk is underwritten by the taxpayer, it's not a real risk. Perhaps if the govt had underwritten all private sector schemes instead of creating the PPF and imposing a levy then more private sector DB schemes would remain. 

That's why I gave the example of the LGPS which mirrors other public sector pension schemes but is fully funded & not underwritten by the taxpayer.

If the LGPS funds ever weren't enough to pay benefits they'd be bailed out by the taxpayer, probably through an increase on employer contribution (ie mainly local govt, ie the taxpayer).

Isn't that just the standard process that occurs now?

An open, funded, DB scheme should always have plenty of assets to meet cash-flow requirements, even if it is heavily underfunded (I think about 15 years of cashflow was fairly typical for schemes entering the PPF). So there should never be a concern that pensioners won't be paid due to no money in the short or even medium-term.

The actuarial valuations regularly assess the funding the scheme and set employer contribution rates accordingly. So if a shortfall emerges, the rates go up, and employers have to fund the higher contribution however they choose.