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Friday, 14 August 2009

Pensions

Pensions is a huge issue at the moment, and for the forseeable future.
I get to do some on this at work, and it's huge.
"Nearly a quarter of the biggest companies on the UK stock market will be unable to pay off their pension deficits, a report says."
Deficits in pensions schemes are huge at the moment, and funding them from companies would pretty much bankrupt them.
I'm not really comfortable with people who have got pretty decent pensions now pulling up the ladder by closing the schemes to new employees.
So far, about the only option i can see as positive would be one large, central pension pot run by the government. How this is run is another matter, but to that anon.
Investing in the stock market was always a very dangerous idea, as the recent falls in the markets have shown. it is largely as a result of the recession that deficits have increased so much. This is very simular to the housing market, in that the reliance on an inflated bubble has made the situation inherently unsustainable.

So this returns to a central government pot. Having a large pot of money held by the government is many people's idea of a nightmare, especially if it's their pension. Well, rather than outsourcing the money, i'd like to see it invested but with provision made that the money is accessible when needed.
Not exactly a great and detailed answer, but I just don't know government well enough (yet) to give concrete proposals.
Rather than having a retirement age, i'd rather that provision was based on length of service, otherwise the differences in life expectancy according to income become even greater. For example, someone rich who leaves university at 21 or later then works till 65, then lives to 75 gets far more for their pension than someone who leaves school at 16, works till 65 then dies by 70. For example.
This doens't seem fair so should be addressed

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