State pensions should be backed by cash, not political promises

The problem with funding a pension as such is that we rely upon the pensions industry, governments and the likes of Maxwell to keep their mits off. Why not just let everyone who wants a standard of life above the basic to save or invest in what they want, scrap the pensions industry and get them working on exports.

With regard to unfunded pensions then the principle is that current contributions are paid out to current pensioners. The difference, if any, is funded by the taxpayer. There was a time in the not too distant past where some schemes worked to the benefit of the taxpayer. Maybe the law should be that increases in pension are allowed only in the years when there is a surplus.

stan

The sentiment is fine - pension should be funded. But State pensions haven't been.

Promises have been made by the State. The only solution to existing benefits is to renege on those promises - I hope this is an unacceptable solution. Nothing should be done, looking backwards. Looking forwards is different - and should be the subject of immediate legislation.

The second best solution must be to cancel all state final salary pensions going forward - and that should include everyone, including politicians.

The replacement pension should then be of the same order as provided by commercial companies who have replace DBSs.

Take away the pension bonus and there may be a sharp reduction in the number of people wanting to be in the Civil Service, which is the current financial climate could amount to a double plus.

30 years ago I read an in-depth book on investments. The author warned against pensions because of a "nasty smell about the pension industry". Around that time my wife took a job which promised a pension of 80% of salary despite the fact that she was 15 year from retirement. When statements and funding did not arrive she was warned and eventually replaced by two young gullible females. It took four years for the ombudsman red tape to recover the missing funds.The pension company (an Equitable firm from Scotland) never did supply a statement despite requests until her retirement, growth had been minimal of course.

Unless you are a high taxpayer then pensions are uneconomical, if you are one then you should have the brains to find profitable investments. The only reason I can think of for the existance of the Industry is the sheer size of it, after all who would employ a million leeches?

This pensions business, whether public or private , in this country is a eal can of worms.

There is so much evidence of missed opportunities to correct the present situation they are too numerous to mention.

as with an earlier contributer, it is unfortunate that the government,employers and insurance companies are in the combined driing seat.

To all the above contributers.

I don,t know how old any of you are but you all seem to know a fair bit about the present situation vis a vis funded or not funded and the volume of money said to be involved in sustaining the present and projected years

If you are old enough, you will remember how the government as economic and social situations prevailed at the time have altered the pension criteria so that the original funding lines have become blurred or non-existant.

I speak about the origins of taxes and NI ti be specific.

Whilst they will deny it now, I had payslips dating fropm 1956 through to 1970,s where the NI contributions were itemised and detailed Nat Health & pension payments.Yes, that makes them both funded.

Now of course, pensions are considered a Benifit and National Health payment have also disappeared into general taxation.

This is much the same as Road Tax.

ALL in ONE BIG POT for them to do what they like with and to carry out their own pet policies. Alot of good it has done us.!!

Along came Thatcher & Major and opened up extra opprotunities to save either for pension of as a savings tax shelter. for those with funds it has been a chance to correct a bad situation into a better one.

As it is, today there will be noe enthusiasm for government to be considering funded or not funded as there are, believe it or not, more pressing items for them to deal with.

However, at the right time and opportunity there is a case for taking the provision away from all these parties and set up an independent office, much the same as that which handles bonds on behalf of government.

This way the investment would presumably be handled effectively. Something similar to that which operates in Chile.

There could be a case for government to reduce this black hole year on year with an infusion of funds ( at least for the the state and public sector obligations) thus reducing the balck hole. After all they denmand this of private pension providers.

The funds could be setup overlaying the present investment funds of investment companies and would be tranparent and for those that wished to involve themselves in the placing of their own prtfolios.

Of course, there is no chance of them doing this as they are only interested in the next 4-5 years like all previous governments

As you can see, I don't hold my breathe for any cogent response to the crisis-yes crisis - especially after hearing " 2 brains " Willett suggesting that the Baby Boomer " generation are the responsible ones who have robbed the present generation of their ASSet Future.

The successive governments had nothing to do with it !!!

Such claptrap it makes me even more depressed for our future.

The current Final Salary schemes to be made paid up as at 31st March 2011.

A new uniform scheme to be introduced from 1st April 2011 with same rules and benefits for all M.P.s Judges, Police, Fire, Teachers, doctors. nurses, civil servants,etc.

The scheme would be "Contracted In".

Contributions on a 50/50 basis.Maximun State 8% of base salary giving a total of 16%.

If employee only wishes to pay 5%, the state pays 5%.

A Money Purchase scheme iether company or indvidual, Group Personal Plan.

Keep it simple, fair and understandable.

It would be nuts for the Government to have funded schemes. Where would it put the money? I will tell you. It would put it into gilts ie it would lend the money back to itself (effectively what it does already but without all of the paperwork in between).