Originally Posted by
TURIN
I have to disagree. Some companies are managing to fund their DB pensions. According to the figures we have been shown by BA approx 22% of companies are not in arrears. Makes you wonder why.
Tesco have done very well wiping a large chunk off the defecit just by adjusting life expectancy down to something more realistic and making assumptions that their returns on investments will be considerably better than current Gilt rates.
Some ...... means only a small number !
22% means 78% have not, so it would be fair to conclude that the effect hasnt hit the other 22%. They may well be newer schemes with few 'takers' and lots of 'payers' on very large payments. Its hard to tell but the key is that only 1 in 5 is okay - for now. Five years ago, the 22% number was probably 30% - and every year, reality bites and more pensions chemes slip into arrears simply because;
People live longer
Returns are lower
People dont pay enough
Unless these three factors alter, no pension scheme in the 22% will survive.
Adjusting life expectancy and changing assumptions changes nothing. You can make any pension fund solvent by assuming everyone dies aged 68 and you get 15% return every year. I would be very surprised if the majority of Tescio staff are on DB ! I imagine some older staff are but what is the ratio 9:1 in favou of DC ?
That doesnt mean there is enough money in the real world. I would have though people were wise to this kind of jiggery pokery nonsense by now !