BA pension deficit £3.7bn....!
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The BA deficit is no different to many of the independents. A large portion of guys have already taken large pots from various companies. The recent drop in gilt yeilds has pushed valuations up 40-50% in some cases. The largest pot taken in my airline is 2.5 million.
Some fear future legislation that would allow companies to walk away from liabilities could creep in especially if the goverment were to run out of money. Cutting the public sector pension liabilty and freeing up business at the same time? Can anyone see the post baby boomers avin it so good?
Just a thought.
Some fear future legislation that would allow companies to walk away from liabilities could creep in especially if the goverment were to run out of money. Cutting the public sector pension liabilty and freeing up business at the same time? Can anyone see the post baby boomers avin it so good?
Just a thought.
The sums are easy
Try to imagine saving £1.8M after taxes over a lifetime. Can't be done. That's why the easy promise ('we will pay you 66% of your salary for the rest of your natural ' ) came unstuck. Those promises were made as part of what was effectively a pyramid selling scheme (DB pensions generally) and now they are going the same way as the old endowment mortgages which offered daft bonuses over a 25 year term as a sprat to catch teh mackeral. Odd, it was an Equitable Life agent who told me this and I still bought the contract. Dummy.
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The real killer for defined benefit pension schemes is :
a) the unfortunate fact we are all (on average !) living longer, hence an annuity when bought, has to be purchased in the context that it may have to be paid for 30 odd years. Not so long ago we were all falling off our perch much earlier
b) very poor investment returns (albeit the last 6 months have been pretty spectacular - but will that last ?)
c) The Labout government (and for that matter any governments) refusal to set a stable platform for developing retirement income for the majority of the population
d) Extremely low interest rates forcing up the cost of buying a £ of pension
e) The short sighted and self serving attitude of Trustees and Employers in allowing contribution holidays in the past.
f) a host of other reasons inluding tax implications
These issues are solvable but it needs a willingness on all (including the Government of the day, Employers, Unions and individuals to work together to arrive at a solution.
In light of that I think we can assume defined benefit schemes and the security they provide are doomed - pity.
Still, I suppose change is the only constant !
a) the unfortunate fact we are all (on average !) living longer, hence an annuity when bought, has to be purchased in the context that it may have to be paid for 30 odd years. Not so long ago we were all falling off our perch much earlier
b) very poor investment returns (albeit the last 6 months have been pretty spectacular - but will that last ?)
c) The Labout government (and for that matter any governments) refusal to set a stable platform for developing retirement income for the majority of the population
d) Extremely low interest rates forcing up the cost of buying a £ of pension
e) The short sighted and self serving attitude of Trustees and Employers in allowing contribution holidays in the past.
f) a host of other reasons inluding tax implications
These issues are solvable but it needs a willingness on all (including the Government of the day, Employers, Unions and individuals to work together to arrive at a solution.
In light of that I think we can assume defined benefit schemes and the security they provide are doomed - pity.
Still, I suppose change is the only constant !
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A report in the Telegraph
Pilots at British Airways move millions out of company pension - Telegraph
If this is true?? then those on the inside must indeed be worried. As the scheme is in deficit, in the case of NAPS about 45%, then the trustees are required to reduce the capital sum of the withdrawal by a proportional amount. This is a huge hit to take.
Pilots at British Airways move millions out of company pension - Telegraph
If this is true?? then those on the inside must indeed be worried. As the scheme is in deficit, in the case of NAPS about 45%, then the trustees are required to reduce the capital sum of the withdrawal by a proportional amount. This is a huge hit to take.
The existing situation whereby the pensionners get everthing and the people below pension age get the leftovers is unfair and unsustainable. I hope to see legislation to bring justice to the situation, invloving a reduction of pensions for those already retired.
Controversial, moi?
The existing situation whereby the pensionners get everthing and the people below pension age get the leftovers is unfair and unsustainable. I hope to see legislation to bring justice to the situation, invloving a reduction of pensions for those already retired.
Very fair.
So a person in their 30s with perhaps another 35 years of ability to earn money should be protected from future pension loss by reducing the pension income of a 75 year old retiree?
Very fair.
Very fair.
Controversial, moi?
....have a 61 year-old, who gets full pension and a 59 year-old who gets nothing,.
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<<<<The existing situation whereby the pensionners get everthing and the people below pension age get the leftovers is unfair and unsustainable. I hope to see legislation to bring justice to the situation, invloving a reduction of pensions for those already retired<<<<<
The current provisions are the only workable system. Once a guy retires his pot is frozen & he is paid according to the rules. The scheme overall may not have sufficient funds to pay all the liabilities, but the 30yr old does not need or even have the right to the money for many years. As long as the employer eventually makes good the shortfall then the 30yr old does not have a case.
The current provisions are the only workable system. Once a guy retires his pot is frozen & he is paid according to the rules. The scheme overall may not have sufficient funds to pay all the liabilities, but the 30yr old does not need or even have the right to the money for many years. As long as the employer eventually makes good the shortfall then the 30yr old does not have a case.
