9th April 2008, 02:19 PM
Posted by Dr Peter Wardle:
Employers contribute to both types. Many commercial organisations, as well as public sector ones, used to run defined benefit schemes, although they are mostly now closed to new entrants, closed altogether, or downgraded from 'final' to 'average' salary schemes (that' what has happened to mine).
Private sector schemes of this sort have generally got into exactly the same kind of problems with deficit as the public sector ones, and the parent company has to make up the difference (passing it on to customers through prices) just as public sector organisations pass it on to taxpayers. Well-managed organisations will have taken measures to eliminate the deficit, through increased company and individual contributions, changes to the scheme itself, etc.
The trouble for public-sector organisations is that they are often hamstrung by the unions if they try to take measures of that sort to address deficits.
1man1desk
to let, fully furnished
Quote:quote:There is a basic statement pension for everybody provided that you have paid the stamps (NI contibutions).Pension schemes fall into two main categories - 'defined benefit' schemes (such as final salary or average salary schemes), and 'defined contribution' schemes, also known as 'money purchase' schemes, where the value of your pension is dependent on stock market performance at the time of your retirement.
Then there are employers schemes where the employer makes a contribution.
There is also the final salary schemes that pays a portion of the final salary index linked such as those recieved by the government or local government employees.
In all case there is a fund which pays the pensions from the returns of investments such as development or the stock market. There is a huge short fall in the amounts for the government households
Employers contribute to both types. Many commercial organisations, as well as public sector ones, used to run defined benefit schemes, although they are mostly now closed to new entrants, closed altogether, or downgraded from 'final' to 'average' salary schemes (that' what has happened to mine).
Private sector schemes of this sort have generally got into exactly the same kind of problems with deficit as the public sector ones, and the parent company has to make up the difference (passing it on to customers through prices) just as public sector organisations pass it on to taxpayers. Well-managed organisations will have taken measures to eliminate the deficit, through increased company and individual contributions, changes to the scheme itself, etc.
The trouble for public-sector organisations is that they are often hamstrung by the unions if they try to take measures of that sort to address deficits.
1man1desk
to let, fully furnished