Quote:
Originally Posted by Traduk
Your last paragraph appears to clearly demonstrate that you have not grasped the concept at all.
To simplify the concept and to put it into a Virgin Media employee's viewpoint..... if your employer was legally able to retain your contribution and retain theirs and use both for day to day expenses on a promise that you will get a good pension at the end (maybe) would you be happy if they realised that their model was deeply flawed and tried to give you three parts of not a lot. That is what the various governments over the past few decades have done and thus the problems ahead.
Quoting stock market performance over the past four years is ludicrous. Pensions are built up over a working lifetime and any performance has to be measured over that duration. Looking back is not much of an assurance in looking forward but one thing is a certainty.
That certainty is that inflation, interest rates and investment performance is dynamic. 30+ years ago when interest rates were hitting 20% nobody would have predicted today's rates but 30+ years before that nobody would have predicted 20%.
IMO people who allow their long term pension prospects to be diluted are allowing the government to respond to a short term flat line interest rates and will pay massively long after the current bunch of idiots have retired to their country mansions to enjoy the fruits of their inherited wealth no doubt bolstered by lucrative deals.
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I understand the concept just fine thanks, that last paragraph was just to make a point that if the employee's and taxpayers (employers) contributions are invested on the stockmarket that they are subject to falls as well as rises.
Yes a pension fund is accumulated over time but it's ridiculous to say that falls in the stock Market over short periods don't affect the overall value of your fund.
The recent stockmarket performance has taken billions of the value of pension funds, the recent BP crisis in the gulf only lasted a few months but also reduced pension funds by millions.
I, in certain years where we have experienced a bust, have had the pleasure of paying into my fund for the year along with my employers contributions, only to see the value of the fund fall overall. In short I lost a whole years contributions, and paid my fund managers for the privilege.
So I'm not so sure you get the concept?
The difference between my pension and a policemans pension in that currently the final value of my fund is not guaranteed, whereas a policemans is, regardless of stockmarket performance, and it is guaranteed by the tax payer.