MegaSack DRAW - This year's winner is user - rgwb
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Chatting to a colleague yesterday and soemthing he said got me thinking. Final Salary schemes need people to pay into them so there is money to pay out. Over the last 30 years companies have laid off huge numbers of staff, every business now seems to be run lean.
These people who have left often have deferred pensions, but very few people are now paying in, and as companies shut more and more schemes to new enterants there will be even less money going in and more going out.
Just strikes me that there are a lot of Pension schemes that can not pay out. regardless of how much you pay in now the scheme won't be able to meet its obligations later.
Just strikes me that there are a lot of Pension schemes that can not pay out
I think this is slated to be a huge problem quite soon. I heard a Cameron or Osborne talking yesteray about making the retirement age 66 in 2013, which seesm to me entirely inadequate. Add to this the trouble that any pension fund is a huge pile of money waiting to be stolen by the clever and unscrupulous
Final Salary schemes need people to pay into them so there is money to pay out.
Not necessarily true. That's how the big State schemes run. Your NI contributions pay your Granny's pension.
Smaller company schemes should have the money already set aside. The problem comes when there's not enough money in the pot. Say people live 20% longer than you expected, companies suddenly have to find a lot of cash.
Smaller company schemes should have the money already set aside. The problem comes when there's not enough money in the pot. Say people live 20% longer than you expected, companies suddenly have to find a lot of cash.
That i think is the point, most companies can't have enough money to pay out. This applies to the big privatised companies to a greater extent than some of the smaller companies. They have let so many people go who now have deffered pensions that should they want their money back investment performance, new contributions, etc. can't help, there is no way of finding the money.
Everyone knows the state scheme relies on the current workers paying for the retired workers pensions, quite how this works is the population falls... why should i pay your pension when i am not going to get anything and you have priced me out of housing, graduate taxes etc.