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Two out of three UK pension schemes are in the red ...
...to the tune of £210bn
Sir Steve Webb, a former pensions minister under the recent coalition government, said Carillion would not be the last big company to fold leaving its pension scheme in jeopardy.
“The question isn’t if there will be another Carillion – it’s when,” said Webb, who is now director of policy at pensions group Royal London.
“With two-thirds of schemes in deficit it is inevitable there will be more insolvencies and more schemes ending up in the PPF.”
https://uk.finance.yahoo.com/news/two-three-uk-pension-schemes-red-124123081.html
It’s not. apparently, that clear. I spent Wednesday morning in a room with 60 pensions actuaries, lawyers, policy people and assorted specialists while I tried to follow their discussions Lots of terms like defined ambition, CDC, mortality pooling that I have an extremely vague (and probably wrong) understanding about but, in essence, it all depends. There is, it seems, broad agreement that there is no real deficit in the majority of cases but there may be a future problem depending on the assumptions that are made about investment, returns, permitted fund holding and lots of other factors. Some actuaries argue that everything’s fine but permitted forecasts are based on over cautious rules. Others say we’re all doomed. From our client’s perspective - given that over a third of people over 55 have less than £10,000 in pension savings anyway - it may well be that Pension Credit would swallow up any pension payment anyway.
Thats interesting Gareth. It does llok like CDC schemes are coming but I thought there was still a lot of resistance from the insurers. Were they represented at this meeting? Whilst I can see the advantage of these schemes over the current set up I still think that if you are looking to pool risk the government can do it better than the private sector.
Either way research from the BMJ shows cuts in health and social spending has led to reduction in life expectancy:
http://bmjopen.bmj.com/content/7/11/e017722
so maybe there is plenty of money…
It does llok like CDC schemes are coming
Well the Post Office intend to ues one now. The session was held under the Chatham House rule so I cant quote but someone who should know thinks the best approach is for some big scheme to go ahead and the regulator will have to fix the workability as it goes along.