Friday, 15 February 2008
Another Pension time-bomb
This story has been doing the rounds in the media today. Effectively the pensions regulator is berating actuaries, again, for not being very good at their jobs, i.e. predicting the future.
As such companies may well be asked to use more conservative estimates of life expectancy which will feed into calculations of pensions defeicits.
The last time this happened with the change of accounting rules to FRS17, nearly the whole UK pension sector was ruined (for employees) by the switch away from final salary schemes.
What companies will do this time to limit exposure will have to be even more drastic, ouch.
Just to compound this, the real problem not highlighted by this Government funded body is for state sector pensions. The impact on the future national finances will be horrendus, with our children asked to pay out even more form their incomes for our [useless] generations (i.e. public sector pensioners) comfy retirements. All the while our own retirements will be less than fun without some serious discipline upon ourselves to save.
Which is extra nice given the speech of earlier this week by Mervyn King saying that we should all expect falling incomes in the immidiate future.
Enjoy your weekend!
Posted by CityUnslicker