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Final salary-based pensions (Read 12619 times)
Roy_Walters
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Final salary-based pensions
Feb 12th, 2002, 11:38am
 
Does anyone share my (slight) concern about companies abandoning final salary-based pensions?  After ErnstYoung, plcs are queueing-up to drop them.  We're told that even if the BBC did the same, existing pensions would be unaffected.  True, but it begs the question as to what would happen if the BBC were to be privatised or funded commercially.  Who owns the Pension Fund?  In the business world, pension funds are listed as assets of the company.  How safe are we, really?
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« Last Edit: Feb 12th, 2002, 5:26pm by Administrator »  
 
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Eileen_Mullen
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Re: Final salary-based pensions
Reply #1 - Feb 13th, 2002, 8:35am
 
The question of what might happen to the BBC Pension Fund if the Corporation ever disappeared or was taken over was raised at the last London Pensioners Liaison Meeting in October 2001.

My notes suggest that the Pension Fund and its supervision by the Trustees is separate from the BBC. It cannot be accessed by the Corporation - and by implication any successor to the Corporation. But negatively, the Corp or successor could reduce its contributions.

The suggestion was that it was more vulnerable to poor investment decisions and the bear market in recent times has reduced its value. Money had been moved from one of the 10 or so fund managers, Schroeders, because of their poor performance.

OK, so the people who run the fund would put everything in the best possible light, but the overall impression was that we were as safe as we could be and a good deal safer than commercial organisations.

There could well have been more detailed reporting in the subsequent Prospero. Certainly the Pensioner Trustee Don Creasey has a very good grip on all these issues and is a brilliant advocate for us! There are moves afoot to get a second pensioner trustee, but I am not optimistic.
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Re: Final salary-based pensions
Reply #2 - Feb 20th, 2002, 8:38pm
 
The threat to final salary-based pension schemes is occupying a lot of column inches at the moment.  There are a lot of changes going on in the pensions sector - and for many people, pensions benefits are being reduced.  Here are some links to newspaper reports on the issue in the past few days:

A backgrounder in the Times "Easy Money" section: Click Here

A story in the Independent about the Nationwide's decision to close its final salary-based scheme to new members: Click Here

Daily Mail Q & A on pensions: Click Here

An FT report  on a National Association of Pensions Funds survey: Click Here

An FT columnist on his own mix of personal and occupational pension schemes: Click Here

An Observer campaign for a "renewed debate about retirement provision": Click Here

A brief explanation of the "crisis" in Investors Chronicle (requires free registration): Click Here

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« Last Edit: Mar 3rd, 2002, 11:35am by Administrator »  

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David_Brewer
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Re: Final salary-based pensions
Reply #3 - Feb 21st, 2002, 9:39am
 
This is a great list of links.  Thanks for putting them all together.
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Bob_Eggington
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Re: Final salary-based pensions
Reply #4 - Feb 25th, 2002, 9:10pm
 
Interesting statistics about the UK pensions industry in Anthony Hilton's comment column in tonight's Evening Standard:

Click Here to read the story.
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« Last Edit: Feb 28th, 2002, 11:08am by Administrator »  
 
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Re: Final salary-based pensions
Reply #5 - Feb 28th, 2002, 7:42am
 
Yesterday's FT  reports that Unison has launched a campaign to stop companies switching off their final-salary based schemes.

It also mentions that the Government has eased the regulations, in order to help hard-pressed pension funds, giving them three to 10 years to restore any underfunding, rather than the current one to five years.

Click Here to read the story.
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« Last Edit: Feb 28th, 2002, 11:10am by Administrator »  

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Re: Final salary-based pensions
Reply #6 - Feb 28th, 2002, 7:49am
 
Another FT story says that 200,000 people in the UK have been transferred out of final-salary schemes into inferior pension arrangements.  

Over the past 10 years, the number of people in final-salary schemes has fallen by at least 1.8 million.

Click Here to read the story.
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« Last Edit: Feb 28th, 2002, 11:07am by Administrator »  

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luke
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Re: Final salary-based pensions
Reply #7 - Feb 28th, 2002, 11:31am
 
I raised this in Ariel late last year but the official response was to ignore it... and I've since been trying to get Ariel to tackle the issue... as far as I know it has not... and despite Eileen Mullen's very useful info, well I frankly have little faith that our trustees won't - at some stage - take a tough, benefit-cutting line... having ditched the old and very decent scheme, and year after year failing to give pensioners the increases that could be available....hmm?
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Reithian
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Re: Final salary-based pensions
Reply #8 - Mar 8th, 2002, 6:16pm
 
I was a bit alarmed to see Marks and Spencer are closing their final-salary-based scheme to new employees.  I've always thought of their scheme as being a bit like the BBC's (gulp).
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Jackboy
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Re: Final salary-based pensions
Reply #9 - Apr 12th, 2002, 9:47pm
 
I have long felt that the final salary schemes are not entirely equitable.  If a man did a perfectly good satisfactory job for 40 years but without getting any promotion his pension related to the amount paid in will be far less than that received by the person who gets numerous promotions during the last decade of his service.  Surely the problem lies in the lack of legislation to protect pension funds and the modern almost universal tendency to live for today and hang tomorrow.

I can not help feeling that if I had been able to invest all the money in property which I and the BBC had paid into the fund on my behalf and managed that property myself I should now be better off.  Further more when I die the property would be part of my estate, not lost to my family for good.  I say this because I do own a small property which I let and which augments my pension very nicely.

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