Private Pensions

  morddwyd 08:31 09 Jul 2010
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I know this has been touched on in another thread, but I didn't want to diversify too much.

Since a private pension is entirely a personal agreement between an employer and employee, albeit perhaps through a union, what possible concern is it of the Government's, unless it's just the Conservatives looking after their major contributors?

Perhaps someone who knows more about economics than I do could explain.

I hasten to add I've no axe to grind (other than my oft expressed dislike of this particular government!) as my pension is in the public sector.

  morddwyd 09:43 09 Jul 2010

I think you misunderstood my point.

Not querying whether an increase is justified or not, but what does it have to do with the Government?

If I wish to pay my retired gardener a pension, why should I not be allowed to calculate any way I wish?

  QuizMan 09:50 09 Jul 2010

I see this as management/manipulation (you choose) by the Government to take the pressure off the state by improving the financial position of pension schemes in the private sector. These were taxed/nobbled (you choose) by the previous Government where previously they were not. The result was the financial "black holes" and the closure of many final salary schemes.

By reducing the amount that private pension providers need to pay out in future years, their financial position should improve. In turn, perhaps fewer will close and keep reliance on the state down.

  natdoor 10:39 09 Jul 2010

At present, private pension schemes end up with an annuity purchase. These may be fixed or index-linked. In the latter case, the starting pension is reduced to reflect the increase over time. This decision is made on an actuarial and business basis and is within the control of the annuity provider.

Compnany schemes usually have provision for a minimum annual increase which may be raised to a higher level based on an inflation index. Of course, choosing a lower index would reduce increases in some years. But I fail to see how a contract between two groups can be altered by a third party, although I have not yet seen details of the proposal. It seems that we may have as big as a confusion in government as with the schools building fiasco.

  john 52 11:00 09 Jul 2010

When you join a company or private scheme the rules of that scheme are there for you the pension scheme member and the pension provider to agree too when you take out your pension !
by agreeing to join the scheme you are both employer and employee agreeing to accept the rules that are in place at the time of joining .Is it then okay to say sorry we are not going to increase the amount of pension you receive by x amount but by y amount as this will save us money.
The fact that some pensioners will not have some of the costs is irrelevant they will have other costs that are not taken into account .
Pension providers were very quick to take pension holidays to reduce there contributions into there schemes when the pension funds were over funded .
I believe it is also going to affect the PPF schemes which have been taken over by the government.
The government want people to save for retirement !!a man 7 years away from retirement now will have to work a extra year until 66 years old and then have a pension that will increase at a lower rate .
Despite David and Nick saying we are all in this together you can bet the MPs will still have there pensions that members of the public can only dream about

  Pine Man 15:52 09 Jul 2010

I think that, although this is headed Private Pensions, the actual ruling introduced by the government applies to ALL pensions other than state pensions. So the teachers, police, government workers etc who have paid into a personal pension scheme as well as the people who have paid into personal company pension schemes will all be treated the same.

According to the press today the difference at the moment is RPI is 5.1% and CPI is 3.4%. Workers who have explicit agreements with their companies governing their increases will be protected.

  morddwyd 18:30 09 Jul 2010

"So the teachers, police, government workers etc who have paid into a personal pension scheme"

Personal pension schemes or not, these are still public sector pensions, not private ones. They are paid entirely from government sources (i.e. taxes) and the government are perfectly entitled to regulate them.

I should know - I've got three of them!

  john 52 19:39 09 Jul 2010

morddwyd

I agree with your sentiments but my argument is if the government wants to do this it should be for new entrants into the scheme not members who are already in the scheme and who have based there retirements on the pension they will receive !!
As you are in receipt of three of them I presume you did make some contribution into your schemes over the years ?
The fact that your contributions you made was not used to fund your pension at a later date is not your fault and the reason it comes from the government coffers !! the goverment cannot spend your contributions you made over the years and then blame public sector workers because the government did not invest your contributions for your retirement
If a insurance company had behaved in this manner there would be a outcry

  spuds 19:57 09 Jul 2010

Perhaps going off tangent, but regarding "If a insurance company had behaved in this manner there would be a outcry".

What about situations like those effecting ex Maxwell and RBS employees, and many other companies who have literally robbed their subscriber's/member's of pension rights?.

  john 52 20:14 09 Jul 2010

The pension protection fund was set up by the Labour Government to protect workers from situations like the above .
It is funded by a levy on solvent pension funds !!

On another note the Conservative party have promised to bail out Equitable Life members at a cost of between £4bn and £5bn !!

  Pine Man 20:29 09 Jul 2010

'They are paid entirely from government sources'

'I should know - I've got three of them!'

Well the fact that you have three of them certainly doesn't appear to make you the expert you profess to be!

I have, unfortunately, just got one of those pensions but I paid 11% of my salary towards it and the pension that is now paid to me is made up mainly of the contributions of those that are still paying their 11% and the difference is made up by the public organisation that I worked for. Yes a small percentage of the money does come from the public purse BUT NOT THE ENTIRE sum.

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