Pensions Ponzi?

[PattayaPhom]

^{The benefits are not the same as only a decade ago, falling annuity rates and GBs raid when he was chancellor have had a disatous effect on many. Considering the tax breaks and the possibility annuity rates will rise in the future should still be suitable for some...the days of 3x salary etc have long gone but PPs still suit somes needs}

[mccw]

^{The benefits are not the same as only a decade ago, falling annuity rates and GBs raid when he was chancellor have had a disatous effect on many. Considering the tax breaks and the possibility annuity rates will rise in the future should still be suitable for some...the days of 3x salary etc have long gone but PPs still suit somes needs}

Could you tell me a bit more about the tax breaks available in regards to the UK?

I'd still be worried about what kind of pay outs if any would be left in three or 4 decades time.

Basically after seeing the Equitable Life debarcle wipe out my parents I don't trust any of them.

[MAJIC]

Whilst I agree with the OP the UK Pension scheme has been lacking in investment since inception,it was one of the first National Pension schemes worldwide and had nothing else as a model,and relied on incoming contributers to fund the scheme.

But to insinuate it as another form of Ponzi scheme is ridiculous. Ponzi schemes are run by the corrupt,who are syphoning money off,for their own gain.

Having been devised after WWII it has paid out many decades (almost 70 years) of contributers, the Pension they said they would.

Your accusations are completely groundless and total nonsense. Please study your subject before you start throwing stupid,unfounded allegations around!

[endure]

^{The benefits are not the same as only a decade ago, falling annuity rates and GBs raid when he was chancellor have had a disatous effect on many. Considering the tax breaks and the possibility annuity rates will rise in the future should still be suitable for some...the days of 3x salary etc have long gone but PPs still suit somes needs}

Could you tell me a bit more about the tax breaks available in regards to the UK?

I'd still be worried about what kind of pay outs if any would be left in three or 4 decades time.

Basically after seeing the Equitable Life debarcle wipe out my parents I don't trust any of them.

If you pay into a private pension scheme you get your income tax rebated back to the scheme (within limits)so if you're on the minimum income tax rate (20%) for every £80 you pay into a pension scheme the Government will top it up with an extra £20. This has nothing to do with the State Pension.

[midas]

Whilst I agree with the OP the UK Pension scheme has been lacking in investment since inception,it was one of the first National Pension schemes worldwide and had nothing else as a model,and relied on incoming contributers to fund the scheme.

But to insinuate it as another form of Ponzi scheme is ridiculous. Ponzi schemes are run by the corrupt,who are syphoning money off,for their own gain.

Having been devised after WWII it has paid out many decades (almost 70 years) of contributers, the Pension they said they would.

Your accusations are completely groundless and total nonsense. Please study your subject before you start throwing stupid,unfounded allegations around!

i think you should also " study the subject " before making wild assertions

State pension Ponzi scheme unravels with retirement at 70

The great Ponzi scheme that lies behind our State pension is unravelling – as they all do eventually – because money being taken from new investors is insufficient to honour promises issued to earlier generations.

None of this should come as a surprise. It is many years since experts began pointing out that Britain’s State pension – like most of its public sector pensions – are unfunded promises which rely on NICs and taxes paid by workers this week to pay pensions to old people next week.

http://blogs.telegra...tirement-at-70/

[Naam]

Whilst I agree with the OP the UK Pension scheme has been lacking in investment since inception,it was one of the first National Pension schemes worldwide and had nothing else as a model,and relied on incoming contributers to fund the scheme.

But to insinuate it as another form of Ponzi scheme is ridiculous. Ponzi schemes are run by the corrupt,who are syphoning money off,for their own gain.

Having been devised after WWII it has paid out many decades (almost 70 years) of contributers, the Pension they said they would.

Your accusations are completely groundless and total nonsense. Please study your subject before you start throwing stupid,unfounded allegations around!

for the record: the German mandatory government pension scheme was introduced in 1891. and it is indeed wrong to label any of this schemes "Ponzi" as there was/is no actual funding, except accumulated reserves, and no promises of specific returns are given.

[mccw]

Ponzi or welfare, either way the point is its not a self funding investment and given the economic outlook liable to not be there and/or have greatly reduced benefits by the time future generations come to be entitled to it.

[mccw]

If say in the last 20years the pension ages has gone from 55 to 65 (soon to be 67), then following the same trajectory by the time I might be drawing on it in 40years the likely age would of overtaken me and stand at 85! By which time I may well be dead already.

[Naam]

If say in the last 20years the pension ages has gone from 55 to 65 (soon to be 67), then following the same trajectory by the time I might be drawing on it in 40years the likely age would of overtaken me and stand at 85! By which time I may well be dead already.

please state which country had 20 years ago pension ages of 55 which are now 65 or soon 67.

[midas]

If say in the last 20years the pension ages has gone from 55 to 65 (soon to be 67), then following the same trajectory by the time I might be drawing on it in 40years the likely age would of overtaken me and stand at 85! By which time I may well be dead already

.

please state which country had 20 years ago pension ages of 55 which are now 65 or soon 67.

OTTAWA — Canada’s public servants will have to pay more for their pensions and new hires will have to work longer than their older colleagues before they can retire with full pension benefits.

The changes will create the first two-tier workforce within Canada’s bureaucracy with all new hires losing the once-sacrosanct early retirement provisions that let public servants retire at 55 and they will be forced to work until age 65, rather than age 60, to retire without a pension penalty.

http://www.ottawacit...9944/story.html

[Naam]

are Canada's public servants the yardstick for the rest of the world? wasn't it about time to introduce new regulations?

[mccw]

Britons

"The state pension age (SPA) is presently 65 for men. Under the Pensions Act 1995, the SPA for women is in the throes of being increased from 60 to 65. The Pensions Act 2011 will raise the SPA to 66 for both men and women by 6 October 2020. Under the Pensions Act 2007, the SPA for both men and women will be raised to 67 between 2034 and 2036, and to 68 between 2044 and 2046."

-http://en.m.wikipedia.org/wiki/UK_State_Pension

If it can be believed.

So how does full investment years moving up affect value also.

Very roughly speaking-

Say 35 years at 600£ per year = £21,000 to receive what £4000py ?

A private pension of 21k would get you what?

When put that way it doesn't sound like such a bad idea.

Maybe I got this all wrong?

I still don't see it holding value. But who knows what will happen by then. Maybe I can spare the money on gamble its ok.

If you had choice between this state pension or a private one the state is better value and less risk?

[ronz28]

What are you going to do when 50%+ of the elderly in poverty without pensions and/or social security? Its absolutely necessary to have pension plans as many can't save or invest, won't save, or lose their savings for a multitude of reasons and will end up on welfare, become criminals to survive, scavenge garbage dumps, etc.

Abuses have to be stopped in the US like the ridiculous growth in disability benefits that used to go to one in 51 workers who pay in and now goes to one in 13 workers, allowing government workers like Rick Perry Governor of Texas to collect a Governor's Salary and a retirement, annuity at the same time, allowing government employees to juice up their retirement with overtime, excessive salaries or other special pays in the final years of their employment used to calculate their pension benefits, etc. Improper investments for quid pro quo favors and failing to make actuarially required annual employer contributions may also enrich management with undeserved bonuses, kickbacks or continued employment will also cause a retirement fund to become underfunded. Current controls just aren't working.

[MAJIC]

Britons

"The state pension age (SPA) is presently 65 for men. Under the Pensions Act 1995, the SPA for women is in the throes of being increased from 60 to 65. The Pensions Act 2011 will raise the SPA to 66 for both men and women by 6 October 2020. Under the Pensions Act 2007, the SPA for both men and women will be raised to 67 between 2034 and 2036, and to 68 between 2044 and 2046."

-http://en.m.wikipedia.org/wiki/UK_State_Pension

If it can be believed.

So how does full investment years moving up affect value also.

Very roughly speaking-

Say 35 years at 600£ per year = £21,000 to receive what £4000py ?

A private pension of 21k would get you what?

When put that way it doesn't sound like such a bad idea.

Maybe I got this all wrong?

I still don't see it holding value. But who knows what will happen by then. Maybe I can spare the money on gamble its ok.

If you had choice between this state pension or a private one the state is better value and less risk?

Not if you convince yourself the State Pension,is a Ponzi scheme!

[mccw]

Britons

"The state pension age (SPA) is presently 65 for men. Under the Pensions Act 1995, the SPA for women is in the throes of being increased from 60 to 65. The Pensions Act 2011 will raise the SPA to 66 for both men and women by 6 October 2020. Under the Pensions Act 2007, the SPA for both men and women will be raised to 67 between 2034 and 2036, and to 68 between 2044 and 2046."

-http://en.m.wikipedia.org/wiki/UK_State_Pension

If it can be believed.

So how does full investment years moving up affect value also.

Very roughly speaking-

Say 35 years at 600£ per year = £21,000 to receive what £4000py ?

A private pension of 21k would get you what?

When put that way it doesn't sound like such a bad idea.

Maybe I got this all wrong?

I still don't see it holding value. But who knows what will happen by then. Maybe I can spare the money on gamble its ok.

If you had choice between this state pension or a private one the state is better value and less risk?

Not if you convince yourself the State Pension,is a Ponzi scheme!

Well the addition of new members paying for old members is basically the definition of a Ponzi scheme is it not. Otherwise its welfare; which is at least more sustainable if prepared to cut back in other areas of state spending to fund it. Overseas aid maybe? EU subsidies?

If the pound half a in value or essentials inflation continues rampant then what's the end value to be? It's already making pensioners choose between heat or eat apparently. The next 5-10years looks bleak let alone 40years from now. I can't see that far ahead but I have no faith in government to take care of me.

[NoshowJones]

Yes many countries pensions are unfunded and even massive black holes, depends whether you trust your government. Being self funded would be a better option but risks also exist depending on how you set it all up, the usual stock market collapses, bank runs, new currency issues paying a pecent on the dollar, real estate collapse, all really positive and uplifting stuff. No easy answers.

Anyone who trusts a UK government must be right off their chumps.

[MAJIC]

Britons

"The state pension age (SPA) is presently 65 for men. Under the Pensions Act 1995, the SPA for women is in the throes of being increased from 60 to 65. The Pensions Act 2011 will raise the SPA to 66 for both men and women by 6 October 2020. Under the Pensions Act 2007, the SPA for both men and women will be raised to 67 between 2034 and 2036, and to 68 between 2044 and 2046."

-http://en.m.wikipedia.org/wiki/UK_State_Pension

If it can be believed.

So how does full investment years moving up affect value also.

Very roughly speaking-

Say 35 years at 600£ per year = £21,000 to receive what £4000py ?

A private pension of 21k would get you what?

When put that way it doesn't sound like such a bad idea.

Maybe I got this all wrong?

I still don't see it holding value. But who knows what will happen by then. Maybe I can spare the money on gamble its ok.

If you had choice between this state pension or a private one the state is better value and less risk?

Not if you convince yourself the State Pension,is a Ponzi scheme!

Well the addition of new members paying for old members is basically the definition of a Ponzi scheme is it not. Otherwise its welfare; which is at least more sustainable if prepared to cut back in other areas of state spending to fund it. Overseas aid maybe? EU subsidies?

If the pound half a in value or essentials inflation continues rampant then what's the end value to be? It's already making pensioners choose between heat or eat apparently. The next 5-10years looks bleak let alone 40years from now. I can't see that far ahead but I have no faith in government to take care of me.

You are determined to only see a Ponzi scheme,where none exists,where the reality is an unfunded Pension scheme,where some pay in for most of their life and some get to draw their pension on retirement,some live a long life,some die before ever drawing their pension,and their contributions stay in the pot,the same as those that die shortlly after retirement,the only gamble is how long you will live,winners and losers the same as most multi member schemes,e.g Car Insurance,some pay in and never draw out,while others have a claim!

Wrongly call it a Ponzi if you must UP2U, the rest of your grievances,are too far off topic to even mention!

[midas]

Britons

"The state pension age (SPA) is presently 65 for men. Under the Pensions Act 1995, the SPA for women is in the throes of being increased from 60 to 65. The Pensions Act 2011 will raise the SPA to 66 for both men and women by 6 October 2020. Under the Pensions Act 2007, the SPA for both men and women will be raised to 67 between 2034 and 2036, and to 68 between 2044 and 2046."

-http://en.m.wikipedia.org/wiki/UK_State_Pension

If it can be believed.

So how does full investment years moving up affect value also.

Very roughly speaking-

Say 35 years at 600£ per year = £21,000 to receive what £4000py ?

A private pension of 21k would get you what?

When put that way it doesn't sound like such a bad idea.

Maybe I got this all wrong?

I still don't see it holding value. But who knows what will happen by then. Maybe I can spare the money on gamble its ok.

If you had choice between this state pension or a private one the state is better value and less risk?

Not if you convince yourself the State Pension,is a Ponzi scheme!

Well the addition of new members paying for old members is basically the definition of a Ponzi scheme is it not. Otherwise its welfare; which is at least more sustainable if prepared to cut back in other areas of state spending to fund it. Overseas aid maybe? EU subsidies?

If the pound half a in value or essentials inflation continues rampant then what's the end value to be? It's already making pensioners choose between heat or eat apparently. The next 5-10years looks bleak let alone 40years from now. I can't see that far ahead but I have no faith in government to take care of me.

You are determined to only see a Ponzi scheme,where none exists,where the reality is an unfunded Pension scheme,where some pay in for most of their life and some get to draw their pension on retirement,some live a long life,some die before ever drawing their pension,and their contributions stay in the pot,the same as those that die shortlly after retirement,the only gamble is how long you will live,winners and losers the same as most multi member schemes,e.g Car Insurance,some pay in and never draw out,while others have a claim!

Wrongly call it a Ponzi if you must UP2U, the rest of your grievances,are too far off topic to even mention!

And you're determined to see life in something which is on its last legs

You don't seem to be in tune with the trend

Pensions will not exist by 2050, expert warns

http://www.telegraph...pert-warns.html

[MAJIC]

@ midas Post number 48

2050,37 years! I doubt anyone on the Planet can make a forcast that far ahead,pure supposition,to fill a Newspaper.

[midas]

@ midas Post number 48

2050,37 years! I doubt anyone on the Planet can make a forcast that far ahead,pure supposition,to fill a Newspaper.

There is no supposition!

If the current generation of young workers are not interested or unwilling to contribute to these schemes,how are they going to survive? Plus, what about the rapid growth of robot workers? Even in China, they are choosing robots rather than humans where employers have the opportunity to save on pension contributions by choosing machines rather than human beings. You will see a rapid growth in robotic workers going forward = no pensions

[MAJIC]

@ midas Post number 48

2050,37 years! I doubt anyone on the Planet can make a forcast that far ahead,pure supposition,to fill a Newspaper.

There is no supposition!

If the current generation of young workers are not interested or unwilling to contribute to these schemes,how are they going to survive? Plus, what about the rapid growth of robot workers? Even in China, they are choosing robots rather than humans where employers have the opportunity to save on pension contributions by choosing machines rather than human beings. You will see a rapid growth in robotic workers going forward = no pensions

Who said anyone has a choice! in the unlikely event of yours and the Daily Telegraph forecast being right,my judgment tells me that something else will replace it: like being forced to take out a Private Pension,funded by deductions from salaries,if the Present State Pension is wound up.Most likely, the State will refund individual NI Contributions to start off individual Private Pensions,and as it's not a Ponzi scheme,there is little chance the Government will pocket NI Contributions already paid.

[midas]

@ midas Post number 48

2050,37 years! I doubt anyone on the Planet can make a forcast that far ahead,pure supposition,to fill a Newspaper.

There is no supposition!

If the current generation of young workers are not interested or unwilling to contribute to these schemes,how are they going to survive? Plus, what about the rapid growth of robot workers? Even in China, they are choosing robots rather than humans where employers have the opportunity to save on pension contributions by choosing machines rather than human beings. You will see a rapid growth in robotic workers going forward = no pensions

Who said anyone has a choice! in the unlikely event of yours and the Daily Telegraph forecast being right,my judgment tells me that something else will replace it: like being forced to take out a Private Pension,funded by deductions from salaries,if the Present State Pension is wound up.Most likely, the State will refund individual NI Contributions to start off individual Private Pensions,and as it's not a Ponzi scheme,there is little chance the Government will pocket NI Contributions already paid.

Ok if the word Ponzi upsets you……. How about “ con game “ ?

the problem that a low monthly pensions contribution from a low paid employee, compounded at a very low rate of interest, is not going to generate a pension that is capable of sustaining life, never mind a reasonable quality of life, on retirement.

Viewed from this perspective, all the apparatus of pensions enrollment, monthly contributions, the provision of a default fund and so on and so forth, looks like nothing more than a con game.

http://www.mindfulmoney.co.uk/?lid=13755

[MAJIC]

@midas Post No. 52

So let's hear your pessimistic pension survival plans?

[ronz28]

Robotics expands human productivity but you still need a controls electrical engineer to program the robotic functions and others humans to perform maintenance on those robots, researchers and professors to improve knowledge, etc. Robotics makes products more affordable and raises everyone's standard of living. Robotics will not reduce the need for human workers but will stimulate change and work in new areas to further improve our lives.

However, we all need income when we no longer work and one way we can all pursue our passions and careers while working, without each person becoming investment experts and constantly monitoring their investments, is to also have a pension system that frees us to be more productive. Pension plan oversight boards, independent accountants, legislators and regulators aren't doing enough to protect the funds for the intended beneficiaries.

[midas]

@midas Post No. 52

So let's hear your pessimistic pension survival plans?

Simple from having my own business during the 1980s and 90s I was able to keep a rather generous lump sum for this exact purpose.

As for the rest of the world. It's not about being pessimistic. It's about being realistic. As the price of food continues to skyrocket there will be very many people even if they do have pensions will not be getting enough income.

[midas]

todays press

Private sector pensions shut down at record rate: Millions face working into their 70s for paltry payouts

http://www.dailymail.co.uk/news/article-2269372/Private-sector-pensions-shut-record-rate-Millions-face-working-

[Naam]

North Korean parents 'eating their own children' after being driven mad by hunger in famine-hit pariah state.

http://www.dailymail...ost_read_module

North Korean pensions a Ponzi scheme?

[mccw]

Companies have closed final salary pension schemes to new staff at the fastest rate on record, according to new research.

The National Association of Pension Funds (NAPF) said only 13% of final salary pensions were open to new joiners last year, a fall of a third from 2011.

It was the biggest reduction since comparable figures started in 2005, when almost half of private sector schemes were open to all employees.

The association's annual survey also showed that the defined benefit funds were increasingly closing to workers already in them.

Higher liabilities created by quantitative easing and low gilt yields have prompted a "barrage" of closures, said the NAPF.

Chief executive Joanne Segars said: "The pressures on final salary pensions have proven too great for many businesses.

"Those starting a new job in the private sector have next to no chance of getting a final salary pension.

"What was once the norm is now a very rare offer, and those who are currently saving into one may find it gets closed."

Although two million private employees are in the schemes a new automatic enrolment system will bring millions of workers into a new pension type that will dominate in the private sector, the association added.

Paul Kenny, general secretary of the GMB union, said: "The recently announced state pension reforms will cost private sector employees about £1bn in extra tax and will further accelerate the juggernaut of final salary closures.

"Many employers aren't interested in providing for a dignified retirement for their workers. The new requirements for automatic enrolment will provide a minimum framework, but this won't be enough."

A Department for Work and Pensions spokesperson said: "Millions of people still benefit from final salary schemes, but their increasing costs means that over the decades many have closed to new members.

"Automatic enrolment into a workplace pension will see many millions more people saving for their retirement, with a contribution from the employer.

"We are working with the industry to ensure that pensions people will be enrolled in continue to be high-quality, low-cost, and we encourage all those who can to go beyond the minimum contribution to ensure they get a retirement income that meets their aspirations."

-sky news app

[ronz28]

Companies with integrity continue their pension plans. An example is Ford that expects to make a $5 billion cash contribution to its plan this year and earned 14.2% on on its pension plan investments in 2012.

http://www.pionline.com/article/20130129/REG/130129885

[mccw]

QE playing its part:

http://bbc.co.uk/news/business-21242738

Not so much a question of integrity as one of affordability, the structure of promises made, demographic and economic realities.