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Bye Bye Pension

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posted on Aug, 13 2009 @ 04:03 AM
How many have grasped the full implications of the state of pension funds? Here's an article that really brings it home.

You may wish to pause when you reach the line that reads "FTSE 100 firms are now paying as much into their schemes to pay off past deficits as they are paying in contributions for current staff... KPMG calculates that within five years, £4 out of every £5 being paid in would be to clear past deficits".

'Tipping point for pension plans'

This information just leaves you at a loss for words:

According to KPMG, the combined pension deficit of the FTSE 100 index firms stood at £80bn at the end of June this year, compared with just £20bn at the end of 2007.

"Just under a quarter of the FTSE 100 are now not able to pay their pension deficits over any reasonable timeframe purely from discretionary cash flow," KPMG's report says.

"Over 2008, significant falls in world stock markets contributed to increases in pension deficits. At the same time the economic downturn has seen revenues and company asset values fall," the report pointed out.

Is the problem being addressed?

Under laws supervised by the Pensions Regulator, pension scheme trustees and employers have to agree a plan for the employer to pay off any deficit in its pension fund, usually within 10 years.

But some employers who have done this have still found that their deficits have continued to rise.

Billions of extra pounds have been pumped into company pension funds in the past few years to pay off deficits, but poor investment returns and rising longevity have caused them to balloon further.

Coming to a neighborhood near you?

And this is before any stock market collapse...

posted on Aug, 13 2009 @ 04:45 AM
reply to post by pause4thought

We are hearing the same sucking sound here on our pensions.

Former head of Pension fund pleads 5th amendment

Seems like they know how to use the constitution when it is to save
their own backside vs. saving the damn country !

I think we need to tell this government servant that his role
is vital to the success in afghanistan like some soldiers have
been told and make this guy a cook on the front line to
jog his friggin memory !

(having him promoted to foxhole sand bag might be too obvious)

Various ppl from various angles see the demise looming.

BOHICA alert for US pension fund

PBGC pefectly times the stock market collapse ?

What a coincidence, some ppl might doubt that...

Let's pile the failed airlines pensions and failed auto pensions onto the PBGC

So if the plan continues as it has every time a company tanks they
are gonna dump the funding of it on the PBGC even thou it is already
technically deficit spending by accounting standards.

[edit on 13-8-2009 by Ex_MislTech]

posted on Aug, 13 2009 @ 02:57 PM
reply to post by Ex_MislTech

Thanks for the thought-provoking articles. The entire system is creaking.

It looks very ugly no matter what angle you examine. Here's an article on the state of US state pensions (from a few days ago):

The National Association of State Retirement Administrators found a nearly $443 billion collective unfunded liability for the 125 state, local government, and teacher pension funds in its most recent survey.

The situation is likely to worsen as the recession punches holes in budgets nationwide and causes big investment losses for defined-benefit pension plans that pay out a fixed income.

But the economic downturn may also lead to more reforms as politicians and taxpayers realize they can no longer afford plush pensions compared to defined-contribution 401(k) plans in the private sector which pay income based on variable investment returns.

2-page article

I suppose systemic change, no matter how difficult, would be preferable to collapse. (Though unions might not immediately see it that way.) But can you imagine the implications if pension fund losses were so great they couldn't actually be covered? What would follow?

This really is a mind-boggling issue.

posted on Aug, 13 2009 @ 05:30 PM
reply to post by pause4thought

Well they are trying to make it collapse, because as Rahm says
never let a good crisis go to waste.

They plan to panic the ppl so badly that they will accept some
new draconian and horrific piece of crap that they are trying
to push thru.

The same crap was pulled in Germany, they are just recycling the tyranny.

Watch Naomi Wolf's - End of America on youtube to get an idea,
and as to proof its on purpose watch Confessions of an Economic
Hitman on there as well.

It was all planned.

[edit on 13-8-2009 by Ex_MislTech]

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