BAE pension fund.

[Al R]

News of its growing deficit might be of interest to some. A loose military connection only, I know.

http://www.thetimes.co.uk/article/woodford-bails-out-of-bae-over-pension-35fj352wm

[The Old Fat One]

You'd know much better than me Al, but this is part of a much greater problem is it not (loads of big company pensions schemes in poor shape, or so I'm led to believe).

Given the taxpayer picks up the tab (or 90% of it) when these go belly up, I'm thinking further pensions legislation not too far down the road.

[Al R]

For thirty years, the electorate was sold the lie, and now the chickens are coming home to roost. The list of funds in (http://http://www.pensionprotectionfund.org.uk/TransferredSchemes/Pages/AllTransferredSchemes.aspx), and those which wanted (http://www.pensionprotectionfund.org.uk/TransferredSchemes/Pages/Nontransferringschemes.aspx) to go in, is depressing. Service personnel need a federation of sorts, to actively represent them to government, and government to the hanger floor, as other public sector bodies are represented. I'm not advocating militancy. With golf yields as they are, as just one factor of many which springs to mind, the current system is increasingly unaffordable and unrealistic, yes. It was five years ago, let alone now. Another example of fudging the pension issue and shuffling it to the right (someone else's problem).

[Chugalug2]

AlR:-
Service personnel need a federation of sorts, to actively represent them to government, and government to the hanger floor, as other public sector bodies are represented.

Surely they do, Al? Isn't that what BAFF was/is supposed to be all about?:-

BAFF - independent staff association for UK armed forces (http://www.baff.org.uk/)

If not then I agree, some professional financial representation is required (especially with golf yields being as they are! ;-)

Your "in" link wouldn't work for me. Here it is again if it helps:-

http://www.pensionprotectionfund.org.uk/TransferredSchemes/Pages/AllTransferredSchemes.aspx

[MPN11]

Don't forget the Forces Pension Society (https://forcespensionsociety.org)

[Melchett01]

You'd know much better than me Al, but this is part of a much greater problem is it not (loads of big company pensions schemes in poor shape, or so I'm led to believe).

Given the taxpayer picks up the tab (or 90% of it) when these go belly up, I'm thinking further pensions legislation not too far down the road.

And just why are so many pension funds in such poor shape? Poor investment choices or dogmatically sticking to relatively 'safe' areas of the market yielding limited growth, or high charges eroding growth potential are both factors. But equally, lack of company investment in their own pensions is more a more likely culprit in many cases. BAe and its predecessors took a pensions holiday for 6 years in the late 80s - early 90s, arguing their fund surplus meant they could do that.

Such holidays clearly benefited the company rather than the scheme members ("Nigel Tinsley, BAe's pensions director, accepted that the firm gained more than the pensioners from the surplus") but were woefully short sighted. The effect of losing the compounded growth of 6 years' employer contributions over the long term was affected further by the compounding erosional effect of inflation, set against the now smaller funds meant that BAe was always setting itself up for a fall down the line given increasing life expectancy and costs of living, both of which could have reasonably been anticipated in principle at least. I wonder how the BAe directors' pension pots are looking now.....

If legislation is due to shore up schemes, it should look at whether companies were negligent in the administration of their scheme, or took long holidays, and if found to be so whilst directors were still sitting fat dumb and happy, those directors should be persued.

[ORAC]

More to the fact that effective zero interest rates on investments since 2008, together with increasing life expectancy, has made them unsustainable.

A report in the papers this week compared the pension funds of Royal Mail and the Post Office - one privatised and the other still in the public sector. Both in exactly the same boat.

Easy to blame companies and "fat cat" executives, but exactly the same thing is going to happen to those of the public sector in the Civil service/NHS etc. The black hole to support either causes both politicians and the Treasury sleep less nights.

Big cuts in store for Royal Mail and Post Office workers' pensions (https://www.theguardian.com/money/2016/aug/10/royal-mail-pension-post-office-hit-brexit-defined-benefit)

2011: Government officials mull over plans to plug £1.3trillion public pensions black hole with new fund (http://www.thisismoney.co.uk/money/pensions/article-2055579/Government-officials-mull-plans-plug-1-3trillion-public-pensions-black-hole-new-fund.html)

2016: The £1.85trn debt black hole in public pensions (http://moneyweek.com/the-1-85trn-debt-black-hole-in-public-pensions/)

£54bn Council Pensions Black Hole (http://www.taxpayersalliance.com/_54bn_council_pensions_black_hole_doncl9ha3twuuk_ke5xdiwiaoo q)

[SARF]

Thatchers pension holiday.. Gordos pension tax raid. Director greed and short term money grabbing ... Low gilts yields arnt a massive problem when inflation is effectively zero .. Legislation requiring pension funds to hold X per cent of the things is more of one ..
The stock market has rallied hugely since 08. As has property.

Hasn't uk life expectancy levelled off now? Due mainly to my generation from the 60's being huge piss heads ��

[ImageGear]

One can only consider the hidden cost of the Treasury's, Quantitative Easing strategy, they are borrowing from your "Peter" for tomorrow, to keep paying their "Paul" today.

Some large corporates have historically performed their own "Quantitative Easing" by unloading their unsaleable assets, at more than premium prices, to their employees pension schemes and extracting the cash value to pay out inflated salaries, share options, directors dividends, golden parachutes, and other marginally legal practices.

The employees are then left with a pension fund shell which is practically worthless. :(

Imagegear

[Al R]

I can't post the picture. The right hand column of tomorrow's business section caught my eye.

https://twitter.com/raf_ifa/status/765298040659910656

[The Old Fat One]

FTSE 100 firms' pension deficit soars, says LCP - BBC News (http://www.bbc.co.uk/news/business-37081542)

Way too simplistic to point the finger at anybody specific (or any agroup). This is part and parcel of a way bigger issue.

[Lyneham Lad]

I can't post the picture. The right hand column of tomorrow's business section caught my eye.

https://twitter.com/raf_ifa/status/765298040659910656

This link (http://www.thetimes.co.uk/article/workers-lose-as-companies-put-investor-payouts-first-qqsgtj2k7) should bring up the article mentioned.

[ShotOne]

"Way too simplistic to point the finger at any individual.." Well Gordon Brown might be good for starters. But actually you're right; we've replaced the basic arithmatic of pensions with wishful thinking for much too long.

[EAP86]

It is "way too simplistic", so why point only at GB? This recent article explains some of the reasons:

Having Their Cake (http://www.havingtheircake.com/content/3_Consequences/3_Cannon%20fodder/fact%20and%20opinion/A%20Short%20history%20of%20UK%20Pensions%20and%20Savings.php )

The use of very low interest rates and quantitative easing (printing money) also does severe damage to pension funds. Might as well blame the Brexiteers as GB...

EAP

[The Old Fat One]

EAP86

Thanks for the link...some interesting views not a million miles from my own

[Wander00]

I rejoined in 1980, just after the rules changed, so my ten 80ths of what I was earning in local government, payable at 65, became between 6 and 7 years worth of armed forces pension calculation, payable at 55, and even better a certain person's lawyers did not notice (as they had not noticed my TA pay and bounties).