Pension Time Bomb Dwarfs Banking Crisis

BoyRacer · **Joined:** Jul 26, 2009 **Posts:** 10088

Pensions 'hole' at top firms of €24bn last year -Dominic Coyle -> http://www.irishtimes.com/newspaper/fin ... 55158.html

Quote:

The pensions “hole” at Ireland’s top indigenous companies was €24 billion at the end of last year, according to a new study published today, €2 billion better than a year previously.

The report by LCP Ireland says the average deficit in defined benefit pension schemes amounts to 17 per cent of the companies’ market capitalisation. However, the situation is dramatically worse in the case of the banks, with the €400 million reported deficit at AIB exceeding its €324 million market cap.

there is more

report is here -> http://www.lcpireland.com/news-and-publ ... efing-2011

Gilroy · **Posted:** Mon Oct 17, 2011 8:30 pm

In advance of tonights Prime Time on pensions...

Quote:

THOUSANDS of pension savers are being hit by charges which eat up as much as 40pc of the value of their retirement pot.

This means a typical pension saver can incur costs of €100,000 over the lifetime of their pension, a study commissioned by the Irish Independent shows. Even on a relatively-modest retirement fund of €250,000, fees and charges can erode more than a third of the pensions pot.

http://www.independent.ie/business/personal-finance/pensions/thousands-losing-up-to-40pc-of-their-pension-pots-with-charges-2896189.html

Quote:

Research has found that charges amount on average to 26pc of the pension 'pot', with smaller schemes having to pay 3.6pc of assets to the pension companies.
...
Larger schemes pay as little as 0.32pc of assets. These disparities, and poor returns, have contributed to a situation where only one in five private sector workers in some sectors have pension coverage.

http://www.independent.ie/business/personal-finance/pensions/charges-for-managing-pensions-adding-to-shortfall-2907836.html

Gilroy · **Posted:** Mon Oct 17, 2011 8:36 pm

Not just topical in Ireland but the UK also. From the Daily Mail back in July.

Quote:

Someone with a typical pension that imposes a flat 1.5 per cent yearly charge, and puts aside £100 a month for 40 years, would lose more than £84,000 from their pension fund.

Worse, those who have had their pension transferred by an unscrupulous financial adviser to a pension charging 3 per cent a year would lose £138,000 from their pension.

This could leave them scraping by on as little as £7,000 a year in retirement, when they could have had more than double this.

http://www.dailymail.co.uk/news/article-2016683/The-hidden-fees-wipe-40-private-pension-funds.html

HouseBuyer · **Joined:** Feb 8, 2007 **Posts:** 4736

Is anyone watching George Lee doing the Pension Shock show? Pretty bleak and depressing viewing.

HouseBuyer · **Joined:** Feb 8, 2007 **Posts:** 4736

A Garda on €50k retiring with a lump sum of €75k and an annual pension of €25k, will cost the taxpayer €1.28 million. How many private sector people expect to have a pension worth €1.28 million?

HouseBuyer · **Joined:** Feb 8, 2007 **Posts:** 4736

Jill Kerby on public sector pensions - "The greatest pyramid scheme of all time".

Puck may be Famous · **Joined:** May 3, 2008 **Posts:** 2040

HouseBuyer wrote:

A Garda on €50k retiring with a lump sum of €75k and an annual pension of €25k, will cost the taxpayer €1.28 million. How many private sector people expect to have a pension worth €1.28 million?

In fairness, you have to subtract the cost of the contributary old age pension to which he is not entitled.

ie. A privatesector worker who saves for a private pension of 15k per year will come out with the same as the garda when you add in his state pension of aprox 10k.

Doesthis mean that the contributary old age pension is worth around €500k? Maybe it is.

(Iknow I am excluding the lump sum)

Gilroy · **Posted:** Mon Oct 17, 2011 9:30 pm

HouseBuyer wrote:

A Garda on €50k retiring with a lump sum of €75k and an annual pension of €25k, will cost the taxpayer €1.28 million. How many private sector people expect to have a pension worth €1.28 million?

And a teacher retiring with €100k lump sum and €33k per annum costs the same? What are the assumptions and what is the agenda?

HouseBuyer · **Joined:** Feb 8, 2007 **Posts:** 4736

Show is finishing on talk of using the €90 billion of Irish pension holdings as stimulus! Pinsters will love that.

grace5715 · **Joined:** Nov 30, 2008 **Posts:** 298

Puck may be Famous wrote:

In fairness, you have to subtract the cost of the contributary old age pension to which he is not entitled.

ie. A privatesector worker who saves for a private pension of 15k per year will come out with the same as the garda when you add in his state pension of aprox 10k.

Doesthis mean that the contributary old age pension is worth around €500k? Maybe it is.

(Iknow I am excluding the lump sum)

The Guard not only gets the lump sum but starts receiving his/her pension in his late 40's the rest of us have to wait until our late 60's for our 10k a year.

Pocket Change · **Joined:** Jan 26, 2009 **Posts:** 19

HouseBuyer wrote:

Show is finishing on talk of using the €90 billion of Irish pension holdings as stimulus! Pinsters will love that.

Yeah. One of the main reason Irish pension funds have performed so poorly recently is their relatively high exposure to Irish assets. This arose because of previous governments encouraging high investment of pension funds in Ireland. What could go wrong this time.

bearishbull · **Joined:** Nov 7, 2006 **Posts:** 856

Puck may be Famous wrote:

HouseBuyer wrote:

A Garda on €50k retiring with a lump sum of €75k and an annual pension of €25k, will cost the taxpayer €1.28 million. How many private sector people expect to have a pension worth €1.28 million?

In fairness, you have to subtract the cost of the contributary old age pension to which he is not entitled.

ie. A privatesector worker who saves for a private pension of 15k per year will come out with the same as the garda when you add in his state pension of aprox 10k.

Doesthis mean that the contributary old age pension is worth around €500k? Maybe it is.

(Iknow I am excluding the lump sum)

Some of those public pensions pay out to widow/er if the pensioner dies before their spouse. This adds to cost/value. some council employees retire on 2/3 pensions and their spouses gets 50% of that pensioner dies first. Not sure if Garda get these spouse pension cover. Anyway the whole point is that as the public state pension is unfunded and people are living so much longer that even the basic public state pension is unsustainable in long term. I know several public servants who retired recently aged late 50s and early 60s and they only paid in a small fraction of the value of their pension entitlements. Wish i joined the public service when i left college, all the ladders have been pulled up now.

treaty_exile · **Joined:** Mar 2, 2010 **Posts:** 149

At the risk of dragging the thread off topic, is George getting the TD pension?

HouseBuyer · **Joined:** Feb 8, 2007 **Posts:** 4736

Guys, the thrust of the debate was not whether these people deserve the pension, it's the fact that these pensions are completely unprovided for.

AWAAF · **Posted:** Mon Oct 17, 2011 9:55 pm

grace5715 wrote:

Puck may be Famous wrote:

In fairness, you have to subtract the cost of the contributary old age pension to which he is not entitled.

ie. A privatesector worker who saves for a private pension of 15k per year will come out with the same as the garda when you add in his state pension of aprox 10k.

Doesthis mean that the contributary old age pension is worth around €500k? Maybe it is.

(Iknow I am excluding the lump sum)

The Guard not only gets the lump sum but starts receiving his/her pension in his late 40's the rest of us have to wait until our late 60's for our 10k a year.

Did you mean late 50s (57 I think!)?

Pension Time Bomb Dwarfs Banking Crisis

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