If the current scheme is closed to new entrants what will the underlying cost to the company be to maintain it for those of us still included?
As the years go by and we have no new people joining and more people retiring- hence drawing from the scheme and no longer making contri's, what will the underlying cost become then?
Surely it could feasibly get to the stage where the number of living retirees greatly outweighs the remaining contributors? This would mean that the company would have to meet a proportionally greater underlying cost does it not?
Worst case scenario- 1 person left in the scheme (probably me) making contri's- 2.5k people retired and drawing from it. Will the company fund that?
50 Pence,
It's my understanding that the current scheme being a defined benefit scheme means that the pension fund as it stands today has to cover
both current liabilities (those in retirement and drawing pension)
and future liabilities (those currently in employment). Therefore contributions being made to the fund today do not pay today's pensions, but
will pay ours when we retire.