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Company Gone Bust and my Pension as Well
Comments
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Clifford_Pope wrote: »Then surely it was rather foolish to enter into commitments that cannot be funded?
It just takes the risk full circle back to the company again.
Not everything is within a Company's control. Besides investment returns falling. Times have change rapidly. Medical advances have resulted in people living longer. People used to go to hospital to die as my other half regularly reminds me.0 -
Clifford_Pope wrote: »Then surely it was rather foolish to enter into commitments that cannot be funded?
It just takes the risk full circle back to the company again.
That is with hindsight. With the information available 30+ years ago the risks could be seen as reasonable.0 -
The first 6 years of my working life back in the 70s, I was employed by a major UK Company who offered a non contributory DB pension with a standard retirement age of 60!! By the 80s, we were making small contributions (3% ish?) and the normal retirement age had gone up to 65. By the 90s, the contribution rate had more than doubled and the scheme closed to new entrants in the early years of this century.
So either the actuaries in the 70s were incompetent -or the world has changed:)0 -
brewerdave wrote: »The first 6 years of my working life back in the 70s, I was employed by a major UK Company who offered a non contributory DB pension with a standard retirement age of 60!! By the 80s, we were making small contributions (3% ish?) and the normal retirement age had gone up to 65. By the 90s, the contribution rate had more than doubled and the scheme closed to new entrants in the early years of this century.
So either the actuaries in the 70s were incompetent -or the world has changed:)
It's not just pensions, everything in the UK is being run into the ground. Feels like a slowly dying country to me...
Sorry to be pessimistic0 -
Male expectation of life at 65
1970: 11 years
1981: 14 years
2016: 22 years
Source: ONS Expectation of Life Principal Projection, England 2010 for 1970 data and 2014 for 1981 and 2016 data0 -
Thank you to all who have commented on this thread. Special thanks to "hugheskevi" for his positive comments.
When I worked for the "original" Hewden Stuart I always found them hard but fair and was sad to read of their demise. Yes there is a Board of Trustees, but there is no means of contacting them to ask questions. I have tried to make contact with them via the contact details I have received from them in the past, but without success. Mercer Ltd are the company who make pension payments to us, they repeatedly say that they don't have any contact details for the Trustees and are as frustrated as I am over the lack of clarity.
I have looked a the Benefit Cap Tables. If I read them correctly, at age 79, the cap is £68,130.11. My current yearly pension is far far less than this amount.
Happy New Year.:T0 -
That is with hindsight. With the information available 30+ years ago the risks could be seen as reasonable.
Reasonable to say "We don't know where any possible shortfall on our commitments will be met from, but if the worst happens, we are sure the same company that our members work for will cough up" ?
I thought pension trustees were ultra-cautious, carefully spreading risks over different kinds of investments, moving out of shares and into safer things like government bonds as retirement neared, etc?
These are experts, far-sighted, looking carefully at the long term.
So they just say "Oh well, Blogs and Co will probably pay".This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
Clifford_Pope wrote: »I thought pension trustees were ultra-cautious, carefully spreading risks over different kinds of investments, moving out of shares and into safer things like government bonds as retirement neared, etc?
These are experts, far-sighted, looking carefully at the long term.
So they just say "Oh well, Blogs and Co will probably pay".
No one could have foreseen the events over the past decade. Low interest rates may be beneficial to those buried under a mountain of debt but not so to those who manage their money more wisely. It is they who are paying the price of current policies.0 -
Clifford_Pope wrote: »
I thought pension trustees were ultra-cautious, carefully spreading risks over different kinds of investments, moving out of shares and into safer things like government bonds as retirement neared, etc?
".
I think that is one of the main drivers of the current deficit predictions that are being made (not in the case where company has gone under).
Gilts / Government Bond yields are very depressed, negative in some cases (Germany I think) and so the potential deficit is larger than it was a few months / years ago when yields were higher.
Guidelines / Rules say be cautious and limit their flexibility to some extent and so they are caught between a Rock & A Hard Place.0 -
If there is a funding shortfall and their only source of contributions is the sponsoring firm, what would you expect them to do?Clifford_Pope wrote: »
I thought pension trustees were ultra-cautious, carefully spreading risks over different kinds of investments, moving out of shares and into safer things like government bonds as retirement neared, etc?
These are experts, far-sighted, looking carefully at the long term.
So they just say "Oh well, Blogs and Co will probably pay".
"Hmm, there is not enough money in the pot. We need to triple our asset values to cover the skyrocketing liabilities caused by pay rises and healthier longer lives.
We can
(a) ask the failing company Blogs and Co for more money to improve the shortfall and not get it, and hope that asset values improve more in real life then they do in the theoretical calculations where we assume very low return on our assets.
(b) ask the failing company Blogs and Co for more money to improve the shortfall and not get it, and move all our growth assets into "safe" government bonds earning pretty much zero returns to guarantee that our returns will definitely be the worst case scenario forecast that we've projected.
(c) give up on asking Blogs and Co for the money and ask the pensions regulator for permission instead to open an alternate business such as a lemonade stand to generate profits and plug the shortfall.
(d) resign as trustees ASAP and hope some other sucker wants the thankless task.0
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