Login Register

Pension pot

By This is Cornwall  |  Posted: March 13, 2010

Comments (3)

DEVON'S pension fund, like all final salary funds, is in deficit (The Herald, March 8). Management has and is continuing to take action to address three major problems and the fund is solvent and able to meet its liabilities for at least the next 25 years.

Problems: Benefits determined nationally were substantially increased in April 2008, partly paid for by changes in employee contributions.

The 1977 changes in tax laws affecting pension plans has a direct loss of over £10million a year and a further indirect loss as company dividends have been trimmed as those companies had to face up to their own pension problems.

The US and UK lead debt crisis has reduced income and damaged investment value.

Remedies:

The 2008 agreement was that future funding problems would be shared equally between employers and employees.

Based on the last actuarial evaluation, employers' contributions have been increased so as to reach 100 per cent cover of liabilities by 2032.

The trustees have taken positive steps to maximise market opportunities and to change fund managers where performance is not acceptable. This has been possible by diversification and a willingness to invest in markets only marginally affected by the US/UK 'disease'. The value of the fund before the market crash was £2.3bn. This fell to £1.6bn at the worst point, but by December 2009 had risen to £2.2bn.

Ideally, the concept of a funded final salary scheme should be retained if both contributors are willing to sustain it. Certainly the local government scheme is more defensible than the police and fire schemes which are paid for out of current income, or the teachers' scheme which receives an annual Treasury grant for the lack of income and growth of its 'notional' investments – that is, investments it does not have!

DAVID STARK

Plymouth City Council Member on Devon Investment and Pension Committee

Do you have something to say? Leave your comment here...

max 4000 characters

3 comments

  • Paracarro  |  December 09 2013, 6:13PM

    This is a total misrepresentation of the FACTS. It depends on how you show the figures! Liabilities for pension funds are paid out over the lifetime of pensioners and that could be over 30 or more years from now. The "deficit" quoted assumes EVERYBODY claims their pensions now! Hypothetically It may be possible if we end up with a civil war and all the men are killed. The figure you quote totally misses out the returns the fund gets from its investments which are added to the value of the fund over the years, while employees continue to pay into the fund. However, In 2013 the total fund was valued at over 3 000 Million Pounds. There is no evidence that any of the 89 Local Government Pension Funds in England and Wales have ever defaulted, and according to the Actuary that has reported on this particular Fund, there is absolutely no likelihood of any default in the future requiring tax payers money to put right. Gold plated is about right (you might as well say painted gold) solid gold they are not! Most Local Government employees are poorly paid and employers do top up their Fund contributions instead of paying them higher wages. The average Local Government worker gets a pension of around £4 200 while his female counterpart is on £3 800 average.

    Rate 0
    Report
  • Paracarro  |  December 09 2013, 6:12PM

    This is a total misrepresentation of the FACTS. It depends on how you show the figures! Liabilities for pension funds are paid out over the lifetime of pensioners and that could be over 30 or more years from now. The "deficit" quoted assumes EVERYBODY claims their pensions now! Hypothetically It may be possible if we end up with a civil war and all the men are killed. The figure you quote totally misses out the returns the fund gets from its investments which are added to the value of the fund over the years, while employees continue to pay into the fund. However, In 2013 the total fund was valued at over 3 000 Million Pounds. There is no evidence that any of the 89 Local Government Pension Funds in England and Wales have ever defaulted, and according to the Actuary that has reported on this particular Fund, there is absolutely no likelihood of any default in the future requiring tax payers money to put right. Gold plated is about right (you might as well say painted gold) solid gold they are not! Most Local Government employees are poorly paid and employers do top up their Fund contributions instead of paying them higher wages. The average Local Government worker gets a pension of around £4 200 while his female counterpart is on £3 800 average.

    Rate 0
    Report
  • Paracarro  |  December 09 2013, 6:12PM

    This is a total misrepresentation of the FACTS. It depends on how you show the figures! Liabilities for pension funds are paid out over the lifetime of pensioners and that could be over 30 or more years from now. The "deficit" quoted assumes EVERYBODY claims their pensions now! Hypothetically It may be possible if we end up with a civil war and all the men are killed. The figure you quote totally misses out the returns the fund gets from its investments which are added to the value of the fund over the years, while employees continue to pay into the fund. However, In 2013 the total fund was valued at over 3 000 Million Pounds. There is no evidence that any of the 89 Local Government Pension Funds in England and Wales have ever defaulted, and according to the Actuary that has reported on this particular Fund, there is absolutely no likelihood of any default in the future requiring tax payers money to put right. Gold plated is about right (you might as well say painted gold) solid gold they are not! Most Local Government employees are poorly paid and employers do top up their Fund contributions instead of paying them higher wages. The average Local Government worker gets a pension of around £4 200 while his female counterpart is on £3 800 average.

    Rate 0
    Report
  • Profile image for This is Cornwall
    Mark, Plymouth  |  March 14 2010, 5:10PM

    And let us just congratulate Mrs Pengelly, for the 5.6m pound Citybus pension pot we tax payers have been saddled with (source PE 1257).

    Rate 0
    Report
  • Profile image for This is Cornwall
    Phil, Mutley  |  March 13 2010, 3:41PM

    Absolutely right Chris. When Brown leaves office, I am going to do an actuarial calculation of the amount his theft in 1997 has cost me in terms of my pension "pot" over the last 13 years. I know he won't pay it, but at least it might make him start to realise some of the enormous damage he has done to ordinary people. A lot of people who have supported him over the years will wish they hadn't when it comes to the time to draw their pension annuity.

    Rate 0
    Report
  • Profile image for This is Cornwall
    Chris, Sutton harbour  |  March 13 2010, 9:59AM

    Gordon Brown robbed the pension funds in 1997 not 1977. This has caused the massive problems in all pension funds, both private and public sector and probably led to massive problems with the stockmarkets. It also effected those without pensions as any life assurance or endowment policies are mainly linked to the stockmarket. This is just one of the many things brown robbed us of!!!

    Rate   1
    Report

      YOUR COMMENTS AWAITING MODERATION

       
       

      MORE NEWS HEADLINES

       
       
       

      MOST POPULAR