Newsbot Posted October 18, 2006 Share Posted October 18, 2006 The Isle of Man Government is facing a £1bn deficit in its pension fund for Manx civil servants. Source : http://news.bbc.co.uk/go/rss/-/1/hi/world/...man/6061948.stm Link to comment Share on other sites More sharing options...
Theskeat Posted October 18, 2006 Share Posted October 18, 2006 But they still topped it up out of the public funds last year to the tune of £15million Link to comment Share on other sites More sharing options...
Tuna Sandwich Posted October 18, 2006 Share Posted October 18, 2006 Oh my God, the Government finally catch up with the legislation they imposed on the private sector several years ago. I bet the private sector end up paying for their incompetence too. Link to comment Share on other sites More sharing options...
b4mbi Posted October 18, 2006 Share Posted October 18, 2006 Unbelievable.... nobody spotted this little gem before now?? monkies could do a better job... Link to comment Share on other sites More sharing options...
When Skies Are Grey Posted October 18, 2006 Share Posted October 18, 2006 monkies could do a better job... What exactly are monkies? Link to comment Share on other sites More sharing options...
b4mbi Posted October 18, 2006 Share Posted October 18, 2006 small monks.... not at all like monkeys in any way... PMSL. Good job I'm not in charge of Governmental Spelling Policy, my errors would cost at least £50m to fix.... Link to comment Share on other sites More sharing options...
When Skies Are Grey Posted October 18, 2006 Share Posted October 18, 2006 LOL.... I wonder though at what point you decide that its a big enough problem to decide to tackle...£1million, £10million, £50million and so on....or maybe it just happens overnight like whoa dude we have just fucked up... Love to be a fly on the wall etc etc.... Link to comment Share on other sites More sharing options...
b4mbi Posted October 18, 2006 Share Posted October 18, 2006 certaintly before it reaches £1bn deficit anyway.... Hike up exisiting members premiums, close it off to new entrants, and sack the existing pension fund managers who have patently not done their job properly. Fair enough you couldn't blame them for world stock market volatility, but hey, did they not think to inform someone in Government when the defecit became over say £50m ??? Then again maybe the pension managers did inform but someone in Government didn't listen... another mf conspiracy theory.... (i.e. speculative bullshit)... oh to be that fly.... Link to comment Share on other sites More sharing options...
Tugger Posted October 18, 2006 Share Posted October 18, 2006 They should certainly be closing it off to new entrants. I am not minded to give any more of MY hard earned salary (and pay for MY OWN pension) just so government workers can have a nice solid retirement (after a life of semi-retirement) Link to comment Share on other sites More sharing options...
haX0red_Account Posted October 18, 2006 Share Posted October 18, 2006 is it actually possible to see the underlying assets of this pension fund and see who made the most losses? Transparency's is appalling if you compare it to how local authorities report to the public in the UK. AFAIK, the government doesn't hire any external consultants to advise on which managers to hire and fire which doesn't help. It all seems to get farmed out to local institutions and with the greatest respect to them all, are never going to come close to the top tier managers from London & NY which would all want to bid for mandates...funny that... Link to comment Share on other sites More sharing options...
John Wright Posted October 18, 2006 Share Posted October 18, 2006 I have a horrible feeling that its down to a sort of accountants own goal. Most pension funds, private or public, were invested in a mix of fixed interest stocks and equities. When the stockmarket did well the value of the fund went up and kept contributions low. A new accounting standard was introduced under the Major Goverrnment which basically said the fund had to have enough in fixed interest investments to pay the pensions. As the stockmarkets fell in 2001, and afterwards, this meant a switch out of equities into low yielding fixed interest investments to stick by the rules, which excarerbated the falls and slowed recovery of the stock markets and left the pension fund managers holding fixed interest investmenst whose value fell as interest rates slowly rose. To be fair the standard was introduced post the bouncing Czech Maxwells depradations on the Mirror pension fund but far from protect private pensions it has just about scuppered them. The only answer is higher retirement age for public and private employees and also make the civil service pension contributory. They only pay 1.5% for family benefits at present, the rest is paid by the tax payer. Of course if the fund had been invested in equities over the last 3 years it would have doubled in value and there would be a surplus as we speak. That is how quickly these things can change. If the accounting standard and solvency ratios were changed back to pre 1993(?) and all pension funds piled out of fixed interest and into equities that would push the stock market even further up from record highs and reduce or eliminate the deficits, not just for IOM Government but many private funds. no good blaming the investment managers who have one arm tied behind their back. The fixed interest investments have just fallen in value again because all the economic data predicts the need to raiser interest rates to 5% next time and it is already built into the price of investmenst and the value of the pound OK my economics is shaky but that is what i understand from my readings recently. Link to comment Share on other sites More sharing options...
haX0red_Account Posted October 18, 2006 Share Posted October 18, 2006 thieawin, good point but I don't think the regs affect this issue and there may be other rules here for these types of scheme. It should have maybe added 50% over the last three years but not doubled. Think it's simply due to weak management and protectionism.. Link to comment Share on other sites More sharing options...
John Wright Posted October 18, 2006 Share Posted October 18, 2006 I have now read the report There is no one billion £ defecit in a fund. The IOM Civil Service Pensions are paid out of current income. There is no fund The headline is grossly misleading. What the report is about is a mess up in Government, yet again, in updating the IOM scheme in line with the UK one. That is now being resolved The present Civil Sevice Pension bill is 30 million £ per year, paid out of tax. I cannot see how the £1 billion figure is calculated in the report but if you invested £1 billion you should get a better return, I hope, than £30 million. I an any event there is a pension reserve fund of £100 million invested in equities. So if you take it you might get 4.5% return and that we already have £100 million invested the amount needed to fully fund would be another £567 million. Still a large sum but not the headline £1 billion My previous post still applies to funded pension schemes but not to the civil Service scheme. My apologies. Link to comment Share on other sites More sharing options...
b4mbi Posted October 18, 2006 Share Posted October 18, 2006 very informative thieawin.. still IMO doesn't excuse Govt still offering final salary pension schemes as employee incentive, should have been closed to new entrants years ago. Hindsight is always 20/20 vision though.... ...make the civil service pension contributory. They only pay 1.5% for family benefits at present, the rest is paid by the tax payer WHATTT???!!!!! I didn't know that, that's outrageous.... anyone come up with any good reasons why they shouldn't contribute like the private sector?? Link to comment Share on other sites More sharing options...
b4mbi Posted October 18, 2006 Share Posted October 18, 2006 ffs... reporters and their facts and figures..... i Link to comment Share on other sites More sharing options...
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