In Reply to: Re: "Action on occupational pensions - Simplicity, security and choice" - A joke or what!? posted by Brian Marks on 17 June 2003 at 10:44:43:
: Well, I'd agree there may be circumstances where the chance of paying out less to scheme members is an incentive for bankruptcy but at least the insurance scheme (after 2005) would then kick in to largely protect members. But I suspect such circumstances will be rare compared with bankruptcies that are going to happen whether there is such an incentive or not. <<
How can a small annual premium based on the current years contributions to a fund with no existing pot and that isn't government backed possibly protect all the built up commitments at the worst point in the industries long history?
Do you think that this move either gives reassurance to current members - evidently the main aim - or give even a modicum of actual protection? It is a complete and utter farce.
A lot needed to be done. The government did nothing other than plunder the funds to up to £100bn by removing tax relief on dividends. When people finally started calling for the governments blood they announced this set of ill-conceived plans, for which there appears to be neither consultation or agreement with any of the main parties. No one (apart from you!) has yet had a view which says "on balance these are good ideas".
I predict that this will hasten the demise of final salary schemes, offer virtually no protection to existing members, but will cause the hastenening of many smaller schemes to "give up the ghost". The additional financial load and responsibility will cause less companies to manage decent pension programmes.
I cannot see how any of the potential small possible benefits will ever outweigh the deficiencies.
GG