I hope all your retirement plans work out as well as you hope they will guys..
I suspect that any younger generation folks might be somewhat envious reading of how well it seems Baby Boomers were able to plan retirement using promised pension payouts, lump sums and early retirement, none of which I suspect will be available to all but the most fortunate of following generations, unless they work in the financial services industry, perhaps..?
I remember well sitting in my late twenties at the interview for my last job, and when the topic of pension possibilities was brought up by personnel, I was less than interested, I just wanted that job...
I got the job, as the new boy I sat at a long table in the billet, nearest the door where every time it opened a cold draught would swirl around me...It did not take long to understand the pecking order and those guys up at the other end of the table where it entered a sort of alcove and where the heater was situated, were the old guard, and their regular topic of discussion was pensions, pensions and pensions, boring or what...? Over the years and as nature took it`s coarse, I moved out of the draught and closer to the heater, and on that slow journey up the table I became ever more interested in the old guards usual topic of discussion.. (-:
In the early 80`s when mortgage rates rose to to their highest, the company offered us the opportunity to join an alternative pension scheme, to assist us as we might be finding finances a little tight. My pension pay-in was 7% of my earnings and the company paid in 14%, the kind offer the company made was to reduce my pay-in to 5% of earnings, they would pay in 7% ....I decided to stick with the old scheme.
The scheme matured at age 60 for everyone, and at 60 I would be four years short of maximum pensionable service. I asked if I could increase my monthly contributions over the years in order to buy the years require to reach the max on retirement... Yes, I could buy added years, but only with a single cash payment, and the offer which was only available for a limited time, equated to quite a few thousand pounds... I declined.
Some years later the company came to us with a suggestion that if we allowed them to borrow from the pension fund, dependant on length of service they would give us additional years entitlement in the pension scheme. Agreement reached, had I earlier paid out the thousands to buy added years, I would have been no better off...!
Around that time, Mr Gordon Brown the then Labour chancellor changed the law on pensions allowing folk to continue working and claim their pensions pay out... Not that Mr Brown had learned from that nice Mr Maxwell that UK company pension funds surplus was HUGE at the time, hard to believe I know... Mr Brown determined to protect us all from the likes of Mr Maxwell ever having the opportunity to rob pension schemes ever again, Mr Brown determined that he would ensure there was to be a given amount per head secured in any pension scheme.... The sting in the tail was that any amount in the fund over his pre determined per capita set point.... would be taxed.... Thus he generated a windfall for the government coffers out of pension funds having to pay the new tax, and from the extra taxation on those who were able to continue working and taking their pension and no doubt spending more on taxable goods and services..A nice little earner for the Govt..?
In time that worked out well enough for many folk with company pensions of a certain age.... until the banking crisis hit and pension funds were reporting losses, deficits and some failed...!! No sign of Mr Brown saying he would restore that which he taxed out of the pension funds in an attempt to off-set the failures... Hmm..?
As an aside the company doctor completed a survey of ALL employees back in the 70`s and there were quite a few hundreds in my local area, which is renown for enjoyment of fried foods, smoking and hard drinking... The doc`s assessment of average lifespan worked out after retiral.....? As best I can remember was supposedly circa seven weeks....!!! No wonder the pension funds had been in such excess at that time and that Mr Maxwell spotted an opportunity ripe for plundering, all of which was well covered in the media at the time, no doubt noticed by Mr Brown who then created a legal route to get in on the act...?
I am no accountant, political pundit, or financial advisor, the above is a rough outline as to my personal perception of events over the years... I would prod EVERY youngster to get themselves educated on pensions and keep up to date with any evolution that might affect pension entitlement.
As an example of how simple it might be to plunder pensions...... While still in employment I attended a pension meeting where the sec of the pension scheme had flown up from London to answer any questions. Being a large spread out organisation we were split up on site into groups relative to billet locations. Getting ever closer to retirement I asked quite a few questions. As the meeting progressed the pension sec. looked at his watch, said he had more sections to visit and had over run the time allocated for our section... Later in the day while passing through security, one of the guards complained to me that he had missed his lunch break as the result of the number of questions I asked, extending the length of the session... !!! Yeah, no wonder the financial services industry and companies alike could slope off with the contents of folks pension funds while they are out to lunch...... Sigh..!
Very fortunately for me my accrued pensions are still paying out, quite how long that might last, given the combination of Truss economics which recently seemingly threatened total collapse of the pension system... and IMF projections for the UK economy...Hmm..? Someone somewhere seems not to have been paying attention....?
