It's still a good deal you've got. For £100k you would barely get more than £5,000 a year by purchaing an annuity.
Oh dear, lucky you're not involved in finance. 100k is what he's put in over a number of years, in a private pension that would be compounded up to give a higher total that the annuity would be paid on.
The question has been done to death. So what's the answer then?
Well....If you work for the local council, the Taxpayers’ Alliance may be telling you what your best friend should be whispering in your ear.....
Psttttt......The Numbers Don't Add Up. Might be an idea to bite the bullet and sort it out. Now. Because if you leave it, and it ends up with the IMF "sorting it out".......
< Nobody seems to have a solution to the basic problem with pensions which is the lack of money to pay them, be it in the private or public sectors. >
The problem with pensions in this country is that people are so poorly educated they can not do arithmetic.
Suppoe you earn £12000 per year. You decide at age 20 to save for a pension, of 10% of your income, £100 per month.
Of course that would be paid about half by you and half by the employer. Let us assume that the money is invested safely and earns 2% per year interest above inflation.
By the time you reach the age of 60 you will have an amount of over £73,000 saved up. That will easily be enough to get you a pension of well over a third of salary, and you will be able to get much more than that if you retire later.
Note that 2% is a very crummy interest rate - over 40 years the stock market will produce much higher returns than that.
Of course if people have not the sense (or education) to actually do that, they won't get a pension, and if they do save, but start much later, again because if lack of education, they won't get that much.
Of course public sector empluees have been doing it and will get decent pensions. It is absolutely senseless to prevent them from doing so in future for no actual real reason.
Private sector companies of course have been not making their share of payments, hoping that shares will rise, and also they have been dipping into the pension funds because they see it as fair game, so private schemes have been in trouble.
The government(s) should have stopped them doing that, after all it is theft. However it is easier to just say 'we can't afford it' and cover it up. If you pay into a Christmas club and when Christmas comes the bloke swans off to Rio with the cash, you'd tell the police and expect them to act. It's the same thing. Do the sums and don't let them screw you.
No, it's not listed here, as I said, it's a well managed fund and has a healthy surplus, no doubt like all the many other LGPS schemes also not listed.
You really need to give a link. It is easily possible for a scheme to have a yearly surplus but a long term deficit.
I think I have read of one scheme where the actuarial valuation showed assets exceed liabilities.
I was reading that many councils don't actually have a 'pension fund' as such for former employees. Pensions are being funded directly from income received from rates and the government.
The word 'rates' should have alerted you to the fact that the article is complete bollocks.
That head in the sand approach doesn't work on me. Ultimately someone has to pay for the public sector pensions and if you ignore the problem it will fall to all taxpayers. I don't see how that is particularly fair.
Public sector pensions are already being reviewed - contributions are going to increase, the retirement date is going to change, accrual rates will change, they are now linked to CPI instead of RPI and final salary pensions are going.
These changes will make a significant difference to the position of the local government pension schemes.
And in any event there is no scheme which is going to have to meet all its liabilities in the short term - it's a purely academic calculation that assumes what the position would be if every live member took retirement immediately which patently isn't going to happen.
This is just the same old right wingers trying to ramp up anti public sector rhetoric again.
And in any event there is no scheme which is going to have to meet all its liabilities in the short term - it's a purely academic calculation that assumes what the position would be if every live member took retirement immediately which patently isn't going to happen.
"I think it's a bit more complicated than that"
Rather compare it with having an endowment to repay your mortgage. At the moment, it's ok, but eventually ,it will bite you on the arse if you do nothing.
If you pay into a Christmas club and when Christmas comes the bloke swans off to Rio with the cash, you'd tell the police and expect them to act. It's the same thing. Do the sums and don't let them screw you.
What if Christmas arrives and it transpires that the money paid into the club was never going to be enough to pay for the hamper, and what is more, the guys who were running the club (Danny and George) are saying that they tried to warn the members that the numbers didn't add up but they failed and ended up shrugging their shoulders knowing that those that followed them would have to deal with a future disaster.
Despite the contracts (that the hamper club members are still waving in the air) the Government, sorry I mean the Hamper Club , pass new emergency rules to cut hamper contents by 50% and announce an enquiry into the failure of past hamper managers to tell members that the defined contents hamper scheme had been unsustainable for a very long time.
This move is so shocking that even hamper club members in Greece are shocked that a default on something which had seemed so safe could happen in the UK.
Oh dear, lucky you're not involved in finance. 100k is what he's put in over a number of years, in a private pension that would be compounded up to give a higher total that the annuity would be paid on.
That's not clear in the post, you are just jumping to conclusions to support your position old chap. You are not considering the effects of inflation and whether the poster is talking about an annual pension in terms of money when he started his employment (no chance) or a projected pension in real terms when drawing down the pension (almost certainly).
In fact what you have just shown is that you know very little about finance indeed.
That head in the sand approach doesn't work on me. Ultimately someone has to pay for the public sector pensions and if you ignore the problem it will fall to all taxpayers. I don't see how that is particularly fair.
Speaking of fairness, here's a public funded pension arrangement that should get you as hot under the collar as it did me.
George Culmer starts next month as the new Finance director at Lloyds, the bank we own 40% of. Here's what he's getting,
'Culmer, 49, would take up his position on 16 May and receive an annual salary of £720,000, as well as a discretionary annual bonus worth up to a maximum of 200% of his salary.
In addition, Culmer is eligible for a long-term performance share award of up to 225% of his salary for 2012, which would vest in full in three years' time if he meets his targets. He will also get an allowance to fund personal pension arrangements worth 25% of his salary, taking his potential annual pay, bonus and benefits to £4m.
On top of that, Lloyds will compensate Culmer for deferred awards and a cash bonus he will forfeit after quitting RSA by giving him £1.9m worth of shares, which vest in 2013 and 2014.'
So, 25% of salary for pension equals £180,000 p.a., banks owned 40% by us, so our bill is £72.000 p.a. For one person. No doubt you're as angry about this as the pensions of bin men and dinner ladies.
Speaking of fairness, here's a public funded pension arrangement that should get you as hot under the collar as it did me.
George Culmer starts next month as the new Finance director at Lloyds, the bank we own 40% of. Here's what he's getting,
'Culmer, 49, would take up his position on 16 May and receive an annual salary of £720,000, as well as a discretionary annual bonus worth up to a maximum of 200% of his salary.
In addition, Culmer is eligible for a long-term performance share award of up to 225% of his salary for 2012, which would vest in full in three years' time if he meets his targets. He will also get an allowance to fund personal pension arrangements worth 25% of his salary, taking his potential annual pay, bonus and benefits to £4m.
On top of that, Lloyds will compensate Culmer for deferred awards and a cash bonus he will forfeit after quitting RSA by giving him £1.9m worth of shares, which vest in 2013 and 2014.'
So, 25% of salary for pension equals £180,000 p.a., banks owned 40% by us, so our bill is £72.000 p.a. For one person. No doubt you're as angry about this as the pensions of bin men and dinner ladies.
I think there is a bit more at stake if this guy messes up rather than if someone in a rather less important job makes a mistake. There are tens of billions of pounds at stake at Lloyds and you are quibbling over tens of thousands, yet ignoring the £54 billion black hole in public sector pensions?
"I think it's a bit more complicated than that"
Rather compare it with having an endowment to repay your mortgage. At the moment, it's ok, but eventually ,it will bite you on the arse if you do nothing.
'if you do nothing' - but that's not the situation because all the local government pension schemes are being amended and the benefits reduced.
I think there is a bit more at stake if this guy messes up rather than if someone in a rather less important job makes a mistake. There are tens of billions of pounds at stake at Lloyds and you are quibbling over tens of thousands, yet ignoring the £54 billion black hole in public sector pensions?
What size will the 'black hole' be in 2014 when the changes are introduced please.
I think there is a bit more at stake if this guy messes up rather than if someone in a rather less important job makes a mistake. There are tens of billions of pounds at stake at Lloyds and you are quibbling over tens of thousands, yet ignoring the £54 billion black hole in public sector pensions?
you seem to be under the delussion that throwing large amounts of money at bankers assures that they don't "mess up"
That's not clear in the post, you are just jumping to conclusions to support your position old chap.
Really? I think this is very clear:
"I will have paid over £100,000 into my pension by the time I retire"
So "For £100k you would barely get more than £5,000 a year by purchaing an annuity." is irrelevant as his pension pot will be bigger than 100k as would be the subsequent annuity.
You are not considering the effects of inflation and whether the poster is talking about an annual pension in terms of money when he started his employment (no chance) or a projected pension in real terms when drawing down the pension (almost certainly).
All of which is correct but just makes any comparison with an annuity even less relevant.
In fact what you have just shown is that you know very little about finance indeed.
But Even then I know that "I will have paid over £100,000 into my pension by the time I retire" does not mean that his pension pot from which an annuity comparison can be made will be 100k.
I think there is a bit more at stake if this guy messes up rather than if someone in a rather less important job makes a mistake. There are tens of billions of pounds at stake at Lloyds and you are quibbling over tens of thousands, yet ignoring the £54 billion black hole in public sector pensions?
So he's a high flyer so he deserves his free pension? Yet poorly paid public sector workers who contribute fully to theirs have to have them cut? This is back to the old Tory argument that the rich need high pay as an incentive but the less well off need threats of job losses to encourage them.
Public sector pensions are paid by taxpayers, taxpayers being their customers. Private sector pensions are paid from revenue from the private sector's customers. We, the customer, have to pay for both. Where's the difference? And of course we'll all be pensioners one day, on the receiving end, having paid for everybody elses in our lifetimes.
So he's a high flyer so he deserves his free pension? Yet poorly paid public sector workers who contribute fully to theirs have to have them cut? This is back to the old Tory argument that the rich need high pay as an incentive but the less well off need threats of job losses to encourage them.
Public sector pensions are paid by taxpayers, taxpayers being their customers. Private sector pensions are paid from revenue from the private sector's customers. We, the customer, have to pay for both. Where's the difference? And of course we'll all be pensioners one day, on the receiving end, having paid for everybody elses in our lifetimes.
The difference is rather clear. We have no choice but to contribute to public sector pensions. Where we spend our money in the private sector is our choice.
I find that with organisations like the Taxpayers Alliance, Migrationwatch or any other single issue group is that they only ever find failures, never successes.
As a result every time they make a statement they become less credible as would anyone who persistently cried wolf.
They are little more than modern day witch finders who find witches everywhere.
I find that with organisations like the Taxpayers Alliance, Migrationwatch or any other single issue group is that they only ever find failures, never successes.
Thats not fair - Taxpayers Alliance and Migrationwatch both publish success stories in their particular fields of interest.
It just happens that most of the success stories tend to come from other countries..:(
I think there is a bit more at stake if this guy messes up rather than if someone in a rather less important job makes a mistake. There are tens of billions of pounds at stake at Lloyds and you are quibbling over tens of thousands, yet ignoring the £54 billion black hole in public sector pensions?
People often use this kind of argument but I've yet to understand how it relates to pension. His overblown salary could certainly be said to account for the responsibility of his position, although I would argue that a mistake by a surgeon or even a bus driver have more serious consequences, but what you are arguing is that because he's had the opportunity to earn lots of money during his working life he should somehow be entitled to that gold-plated income when he's not working too? That's fine if you hold a consistent view, but you don't. You're arguing that people who are working, have signed pensions contracts, shouldnt necessarily be entitled to what was agreed in that contract.
Comments
Oh dear, lucky you're not involved in finance. 100k is what he's put in over a number of years, in a private pension that would be compounded up to give a higher total that the annuity would be paid on.
Well....If you work for the local council, the Taxpayers’ Alliance may be telling you what your best friend should be whispering in your ear.....
Psttttt......The Numbers Don't Add Up. Might be an idea to bite the bullet and sort it out. Now. Because if you leave it, and it ends up with the IMF "sorting it out".......
The problem with pensions in this country is that people are so poorly educated they can not do arithmetic.
Suppoe you earn £12000 per year. You decide at age 20 to save for a pension, of 10% of your income, £100 per month.
Of course that would be paid about half by you and half by the employer. Let us assume that the money is invested safely and earns 2% per year interest above inflation.
By the time you reach the age of 60 you will have an amount of over £73,000 saved up. That will easily be enough to get you a pension of well over a third of salary, and you will be able to get much more than that if you retire later.
Note that 2% is a very crummy interest rate - over 40 years the stock market will produce much higher returns than that.
Of course if people have not the sense (or education) to actually do that, they won't get a pension, and if they do save, but start much later, again because if lack of education, they won't get that much.
Of course public sector empluees have been doing it and will get decent pensions. It is absolutely senseless to prevent them from doing so in future for no actual real reason.
Private sector companies of course have been not making their share of payments, hoping that shares will rise, and also they have been dipping into the pension funds because they see it as fair game, so private schemes have been in trouble.
The government(s) should have stopped them doing that, after all it is theft. However it is easier to just say 'we can't afford it' and cover it up. If you pay into a Christmas club and when Christmas comes the bloke swans off to Rio with the cash, you'd tell the police and expect them to act. It's the same thing. Do the sums and don't let them screw you.
I think I have read of one scheme where the actuarial valuation showed assets exceed liabilities.
Public sector pensions are already being reviewed - contributions are going to increase, the retirement date is going to change, accrual rates will change, they are now linked to CPI instead of RPI and final salary pensions are going.
These changes will make a significant difference to the position of the local government pension schemes.
And in any event there is no scheme which is going to have to meet all its liabilities in the short term - it's a purely academic calculation that assumes what the position would be if every live member took retirement immediately which patently isn't going to happen.
This is just the same old right wingers trying to ramp up anti public sector rhetoric again.
Rather compare it with having an endowment to repay your mortgage. At the moment, it's ok, but eventually ,it will bite you on the arse if you do nothing.
What if Christmas arrives and it transpires that the money paid into the club was never going to be enough to pay for the hamper, and what is more, the guys who were running the club (Danny and George) are saying that they tried to warn the members that the numbers didn't add up but they failed and ended up shrugging their shoulders knowing that those that followed them would have to deal with a future disaster.
Despite the contracts (that the hamper club members are still waving in the air) the Government, sorry I mean the Hamper Club , pass new emergency rules to cut hamper contents by 50% and announce an enquiry into the failure of past hamper managers to tell members that the defined contents hamper scheme had been unsustainable for a very long time.
This move is so shocking that even hamper club members in Greece are shocked that a default on something which had seemed so safe could happen in the UK.
That's not clear in the post, you are just jumping to conclusions to support your position old chap. You are not considering the effects of inflation and whether the poster is talking about an annual pension in terms of money when he started his employment (no chance) or a projected pension in real terms when drawing down the pension (almost certainly).
In fact what you have just shown is that you know very little about finance indeed.
That's what's said about contracts for people at the top, the contract is sacrosanct. But for ordinary workers, that's another matter.
Speaking of fairness, here's a public funded pension arrangement that should get you as hot under the collar as it did me.
George Culmer starts next month as the new Finance director at Lloyds, the bank we own 40% of. Here's what he's getting,
'Culmer, 49, would take up his position on 16 May and receive an annual salary of £720,000, as well as a discretionary annual bonus worth up to a maximum of 200% of his salary.
In addition, Culmer is eligible for a long-term performance share award of up to 225% of his salary for 2012, which would vest in full in three years' time if he meets his targets.
He will also get an allowance to fund personal pension arrangements worth 25% of his salary, taking his potential annual pay, bonus and benefits to £4m.
On top of that, Lloyds will compensate Culmer for deferred awards and a cash bonus he will forfeit after quitting RSA by giving him £1.9m worth of shares, which vest in 2013 and 2014.'
http://www.guardian.co.uk/business/2012/mar/01/new-lloyds-finance-director-george-culmer?INTCMP=SRCH
So, 25% of salary for pension equals £180,000 p.a., banks owned 40% by us, so our bill is £72.000 p.a. For one person. No doubt you're as angry about this as the pensions of bin men and dinner ladies.
I think there is a bit more at stake if this guy messes up rather than if someone in a rather less important job makes a mistake. There are tens of billions of pounds at stake at Lloyds and you are quibbling over tens of thousands, yet ignoring the £54 billion black hole in public sector pensions?
'if you do nothing' - but that's not the situation because all the local government pension schemes are being amended and the benefits reduced.
What size will the 'black hole' be in 2014 when the changes are introduced please.
you seem to be under the delussion that throwing large amounts of money at bankers assures that they don't "mess up"
however meanwhile in the real world ....
"I will have paid over £100,000 into my pension by the time I retire"
So "For £100k you would barely get more than £5,000 a year by purchaing an annuity." is irrelevant as his pension pot will be bigger than 100k as would be the subsequent annuity. All of which is correct but just makes any comparison with an annuity even less relevant. But Even then I know that "I will have paid over £100,000 into my pension by the time I retire" does not mean that his pension pot from which an annuity comparison can be made will be 100k.
Public sector pensions are paid by taxpayers, taxpayers being their customers. Private sector pensions are paid from revenue from the private sector's customers. We, the customer, have to pay for both. Where's the difference? And of course we'll all be pensioners one day, on the receiving end, having paid for everybody elses in our lifetimes.
As a result every time they make a statement they become less credible as would anyone who persistently cried wolf.
They are little more than modern day witch finders who find witches everywhere.
Thats not fair - Taxpayers Alliance and Migrationwatch both publish success stories in their particular fields of interest.
It just happens that most of the success stories tend to come from other countries..:(
People often use this kind of argument but I've yet to understand how it relates to pension. His overblown salary could certainly be said to account for the responsibility of his position, although I would argue that a mistake by a surgeon or even a bus driver have more serious consequences, but what you are arguing is that because he's had the opportunity to earn lots of money during his working life he should somehow be entitled to that gold-plated income when he's not working too? That's fine if you hold a consistent view, but you don't. You're arguing that people who are working, have signed pensions contracts, shouldnt necessarily be entitled to what was agreed in that contract.
Plse splain.
Perhaps they struggle to find things?