Final Salary pensions are perfectly sustainable if they are properly funded, and if the funding is invested into productive enterprise (for want of a better word).
Today's problem with Final Salary Pensions is the funding. Public Service pensions are unfunded with the govt making guarantees out of taxation. This is a more a philosophical issue than an economic one. However most private companies pensions are under-funded because the private companies DID NOT PAY THE PENSION CONTRIBUTIONS THEY WERE CONTRACTED TO PAY between the mis-80s to around 2005. Basically stock market returns were above average for twenty years so that companies could argue that they did not need to make their full contributions to cover their pension commitments. Now that the trend is under average they are squealing and cancelling this type of pension. There is no mention of them actually repaying the contributions they missed just as at the time there was no mention of offering their employees "contribution holidays" either. Because I have a great deal of respect for actuarial science, I think that there is a good chance that if a company paid its full contributions over the working life of its employees, there would be no under-funding of a final pension salary scheme. I really do feel that the problems with these schemes is truly (for once) an example of the bosses robbing the workers. Damian PS my first IS job in 1985 was reprogramming pension schemes to allow "premium holes" and "premium holidays" so that the employers contributions did not have to be paid. On Wed, May 4, 2011 at 11:41 AM, Richard Naef < [email protected]> wrote: > ......s idea's pale into > insignificance with the concept of "the Final Salary Pension" Jesus what > drugs were we taking when we thought that was a sustainable idea! I am > afraid euthanasia is the only answer to our problems.......... > > _ > _______________________________________________ Leedslist mailing list Info and options: http://mailman-new.greennet.org.uk/mailman/listinfo/leedslist To unsubscribe, email [email protected] MARCHING ON TOGETHER (There's it)
