Virginia P Posted October 18, 2006 Share Posted October 18, 2006 The "billion pound" figure only applies if every civil servant suddenly reaches the last day of service, all on the same day. That is if all 8000 all hit 60 tomorrow - that would be the debt. Link to comment Share on other sites More sharing options...
haX0red_Account Posted October 19, 2006 Share Posted October 19, 2006 Thieawin, I was interested in your post about the effect of a new SSAP on pension funds. At that time I was working for a company that had a hugely overfunded pension scheme to the tune that it was non-contributory for employees for the whole time I worked there (16 years). This was confirmed by each actuarial triennial review. When this new standard was introduced there was much concern that the effect was to dramatically reverse it. I can't remember the nuts and bolts of how it had that effect, but it did and I often wonder if the current 'pension crisis' is as much to do with accounting presentation than actual underfunding. FRS17 hasn't helped it but overall has had a neutral impact but the crisis is very real and not due to accounting conventions imo Link to comment Share on other sites More sharing options...
John Wright Posted October 19, 2006 Share Posted October 19, 2006 In England they have blamed Brown's £ 5 billion tax raid reslating to tax credits but the acounting standard seems the real culprit. Everyone had to switch out of equities at a time they were weak and into fixed intertest when intertest levels low, no capital growth possible = black holes Link to comment Share on other sites More sharing options...
haX0red_Account Posted October 19, 2006 Share Posted October 19, 2006 In England they have blamed Brown's £ 5 billion tax raid reslating to tax credits but the acounting standard seems the real culprit. Everyone had to switch out of equities at a time they were weak and into fixed intertest when intertest levels low, no capital growth possible = black holes think there's a few separate issues here: - i don't think FRS17 forces you to switch out of equities; it just defines valuation methods and puts deficits on the balance sheet. FSA regulations on insurer solvency do however. - there are still lots of companies yet to start reporting under FRS17 and they still have major deficits so if they haven't already adopted the new standard it can't be responsible for the deficits solely. If anything it could be argued that as its main is transparency, it should actually reduce deficits as it will eventually force businesses to address the issue. Link to comment Share on other sites More sharing options...
Chinahand Posted October 19, 2006 Share Posted October 19, 2006 The "billion pound" figure only applies if every civil servant suddenly reaches the last day of service, all on the same day. That is if all 8000 all hit 60 tomorrow - that would be the debt. Are you sure? If so the person writing the report is a financial cretin! I would be pretty certain the figure is the Present value of all future pension payments, or the size of the investment that is required to cover these payments; which should be the same thing ... erm thinking about it ... there are some assumptions about rates of return and inflation in there which might complicate it! IE If the scheme required you to pay £1 today and £1.03 in a years time; and inflation was 3% then the Present value of the payments would be £2. Actuaries etc love this sort of thing! Link to comment Share on other sites More sharing options...
Theskeat Posted October 19, 2006 Share Posted October 19, 2006 The MEA are about to pension off / make redundant 50 members of staff. those with the years in will get a minimum of £33k lump sum and £300 pw Link to comment Share on other sites More sharing options...
haX0red_Account Posted October 19, 2006 Share Posted October 19, 2006 The "billion pound" figure only applies if every civil servant suddenly reaches the last day of service, all on the same day. That is if all 8000 all hit 60 tomorrow - that would be the debt. Are you sure? If so the person writing the report is a financial cretin! I would be pretty certain the figure is the Present value of all future pension payments, or the size of the investment that is required to cover these payments; which should be the same thing ... erm thinking about it ... there are some assumptions about rates of return and inflation in there which might complicate it! IE If the scheme required you to pay £1 today and £1.03 in a years time; and inflation was 3% then the Present value of the payments would be £2. Actuaries etc love this sort of thing! true, and what do they know? The profession that did equitable life in! great in mathsworld, weak in real world! Link to comment Share on other sites More sharing options...
thebees Posted October 19, 2006 Share Posted October 19, 2006 If it's really that much of a cushy number - jump in! Sore point, I had a job in the tourist board once, I didnt get to start though. Something to do with an article in the paper about a teenage drugs girl on probation, would have been ok if I was a bank robber or rapist or murderer, but a pot head? Stone me Similar problem when I started nurse training, drugs? oh no you can never work in a hospital if you have a drugs conviction, even if it was back in the dark ages, crimes like armed robbery and theft become spent and you do not have to declare them, drugs? Oh no, the scourge of society, thats me alright. I did get depressed about it but now, I couldnt give a monkeys, IMO I'm alright, my children are fantastic, my husband is happy, my job is a laugh (and I come and go as I please) and my home is neat and tidy. Still a bit miffed that people like that scumbag Corkill get a little slap for stealing and conning and others are classed as criminals for smoking a bit of weed. /rant over If the pension scheme went into a bank and said, "Show me the money" what would happen? Where are a bank going to get that kind of money from? I mean real money not the electronic kind that makes the world go around...Like the chelsea boss, say he closed his bank account and wanted the cash how would that happen? Link to comment Share on other sites More sharing options...
haX0red_Account Posted October 19, 2006 Share Posted October 19, 2006 If it's really that much of a cushy number - jump in! Sore point, I had a job in the tourist board once, I didnt get to start though. Something to do with an article in the paper about a teenage drugs girl on probation, would have been ok if I was a bank robber or rapist or murderer, but a pot head? Stone me Similar problem when I started nurse training, drugs? oh no you can never work in a hospital if you have a drugs conviction, even if it was back in the dark ages, crimes like armed robbery and theft become spent and you do not have to declare them, drugs? Oh no, the scourge of society, thats me alright. I did get depressed about it but now, I couldnt give a monkeys, IMO I'm alright, my children are fantastic, my husband is happy, my job is a laugh (and I come and go as I please) and my home is neat and tidy. Still a bit miffed that people like that scumbag Corkill get a little slap for stealing and conning and others are classed as criminals for smoking a bit of weed. /rant over If the pension scheme went into a bank and said, "Show me the money" what would happen? Where are a bank going to get that kind of money from? I mean real money not the electronic kind that makes the world go around...Like the chelsea boss, say he closed his bank account and wanted the cash how would that happen? the bank should have met its capital adequacy requirements so when a big withdrawal happens, it's at least covered by other assets and they would have a credit line in place to cope with any others. It would presumably be picked up during the quarterly deposit submissions they make i.e they probably wouldn't be able to take that much money in if it meant 1 customer had 70% of the total deposits Link to comment Share on other sites More sharing options...
thebees Posted October 19, 2006 Share Posted October 19, 2006 Ahh, right. So how does it work when a bank banks with a big bank, is it ok for Mr Milliontrillionaire to have money in both banks? Like, I bank with the IoM bank, they bank with Natwest (or who ever), Natwest bank with Bank of England (or who ever, but you get my point). All the banks are banks within banks arent they? the private banks all bank with bigger banks, thats who does their clearing for them. Oh Im confusing myself now, but the point is, its all fake and I dont think that there is enough money in circulation to cover some of the amounts of money all these financiers go on about. Link to comment Share on other sites More sharing options...
haX0red_Account Posted October 19, 2006 Share Posted October 19, 2006 Ahh, right. So how does it work when a bank banks with a big bank, is it ok for Mr Milliontrillionaire to have money in both banks? Like, I bank with the IoM bank, they bank with Natwest (or who ever), Natwest bank with Bank of England (or who ever, but you get my point). All the banks are banks within banks arent they? the private banks all bank with bigger banks, thats who does their clearing for them. Oh Im confusing myself now, but the point is, its all fake and I dont think that there is enough money in circulation to cover some of the amounts of money all these financiers go on about. 'spose so! never really thought about it but correct abou there not enough money in circulation and that's due to credit- in theory credit is used to buy stuff that earns a higher return than when deposited so if it got called in it should be OK but a bit hedwreckin! Link to comment Share on other sites More sharing options...
localyokel Posted October 19, 2006 Share Posted October 19, 2006 The "billion pound" figure only applies if every civil servant suddenly reaches the last day of service, all on the same day. That is if all 8000 all hit 60 tomorrow - that would be the debt. No it isn't. Not even the government would pay someone for such a totally stupid observation. Its the amount that is going to be needed over time to cover the liabilities as they fall. At the moment most of the money needed to pay pensions is coming out of cash flow. Taxes in are used to immediately pay out pensions due. There is no real "fund" they can dip into so it just becomes a bigger burden the economy as a whole has to suffer over time. As this is costing £30m a year today you then have to consider what the future position will be with wage increases, inflation etc. But the time horizon is long. Link to comment Share on other sites More sharing options...
Virginia P Posted October 19, 2006 Share Posted October 19, 2006 The "billion pound" figure only applies if every civil servant suddenly reaches the last day of service, all on the same day. That is if all 8000 all hit 60 tomorrow - that would be the debt. No it isn't. Not even the government would pay someone for such a totally stupid observation. Its the amount that is going to be needed over time to cover the liabilities as they fall. That's what I said (in an extremely clever way) - keep up. Link to comment Share on other sites More sharing options...
localyokel Posted October 19, 2006 Share Posted October 19, 2006 That's what I said (in an extremely clever way) - keep up. So you didn't ACTUALLY say the more moronic statement. The "billion pound" figure only applies if every civil servant suddenly reaches the last day of service, all on the same day. That is if all 8000 all hit 60 tomorrow - that would be the debt. My mistake. I must use my reading glasses more. Link to comment Share on other sites More sharing options...
Lonan3 Posted October 20, 2006 Share Posted October 20, 2006 My mistake. I must use my reading glasses more. After reading through this thread, I really think I should use my drinking glasses more! Link to comment Share on other sites More sharing options...
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