Best private pension?
- Thread starter helpimcrap
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I don't think anyone is questioning that. The question is will the scheme be worth anything when you retire.
Pensions are basically a giant ponzi scheme, in that our contributions are paying for the pensions of those claiming today. This is fine, just as long as people continue to pay in to fund the scheme when we retire ...
Is that based on a fixed sum amount? - seems a rather percentage (if it was for example 14.5 and 9.5, then a bit different).
I thought mine was fairly good with 6% self and 6% employer contribution - guess hearing everyone else's it seems fairly low. I guess they make up with other flexible benefits.
I contribute 7% and get 18% from my private employer
. Don't think the so called "gold-plated" public sector pensions match up to all, though are probably better than average.
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Whilst this is true for the State Pension, trying to apply the same to the workplace pension is a distortion of the truth.
I thought mine was fairly good at 10% but some of those chucking in +10% for smaller contributions is crazy good!
I only pay in about 6% at the moment, as time goes by I will go up when kids get older and I get to see some of money
I only pay in about 6% at the moment, as time goes by I will go up when kids get older and I get to see some of money
Is it? How so? The money that is 'in' my private pension is funding the people claiming on their private pension today.
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I am assuming then that you are in a final salary pension scheme.
In a DB scheme all the money is in 1 big pot, so you are correct in that your money is in it and pensions are being taken from it.
But all the money that the pensioners contributed are also in the pot, all the deferred members money is in the pot, plus all the investment returns from those contributions. The money being used to pay the current pensioners are not necessarily 'your contributions'.
If you are in a final salary scheme that is so financially crippled that it is reliant on the current active members to pay the pensioners I'd move my pension because it's not going to last very long.
The point is, is there enough in the pot to pay everyone, if money stopped coming into the pot tomorrow? A lot of the money the current pensions contributed will no longer be in the pot as they will have been paying the pensioners ahead of them (hence my contributions/return are paying for their pension).
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As a member of a final salary scheme every year your pension scheme is legally obligated to send you a Summary Funding Statement that will tell you exactly this.
It will tell you exactly what the value of all the schemes assets. It will then provide an actuarial assessment of the likely liabilities. It should also say what would happen if the scheme closed tomorrow and how the scheme would deal with the likely shortfall in funding.
It will tell you exactly what the value of all the schemes assets. It will then provide an actuarial assessment of the likely liabilities. It should also say what would happen if the scheme closed tomorrow and how the scheme would deal with the likely shortfall in funding.
Railway Final Salary Scheme. Excellent benefits vs contributions (*both employer and employee funded), plus the option for AVC known as Brass 2 which certainly last time I checked had grown at around 4% pa over the previous couple of years.
I've only got just over two years left to get the full forty years of contributions into the scheme (assuming the goalposts don't move in the meantime), at which point I will seriously be looking at the early retirement possibilities as at 58 you can go on 90% of scheme pay.
I've only got just over two years left to get the full forty years of contributions into the scheme (assuming the goalposts don't move in the meantime), at which point I will seriously be looking at the early retirement possibilities as at 58 you can go on 90% of scheme pay.
Soldato
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They nail you for 5% a year?
Or is their standard age now 65?
Or is their standard age now 65?
but jumped ship for various, justifiable, reasons.
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At a very basic level, in funded schemes the money gets invested and schemes are obligated to try and balance the assets and liabilities so that everyone gets what they are owed. Doesn't always work obviously and some schemes do go bust etc..
In unfunded public sector schemes the money just sits there, and there is no obligation to balance the books. Any shortfall is covered directly by the Government, which leads to the inevitable "my taxes are paying your pensions" rabble.
Unfunded private sector schemes are much rarer and the only ones I know of are schemes with a normal funded final salary pension, with an additional unfunded pension on top for members over the salary earnings cap.
Great, thanks! So which is better in your opinion? Unfunded public where you're guaranteed to get what you're owed? Or a funded scheme which, through investments, could earn you more pension at the risk of going belly up?
Well historically final salary schemes have been more generous.