26th March 2008, 08:57 PM
I think Unit of 1 has a valid point about government pensions and hoi they are paid for and I think David is being naive when he says that you just charge more to cover the cost of whatever. I share Uof1 anger.
Looking at the accounts Uo1 posted there are some serious funding issues for the pension funds. (The FTSE only fell 0.5 of a point today). Archaeological organisations are no different to others.
There is a basic statement pension for everybody provided that you have paid the stamps (NI contibutions).
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 and I read somewhere that this was going to cost every household something like 40k in extra taxes.
OK lets consider the real monetary value of a LPA pension paying 50% of a final salary and how much it would cost me to buy a similar product.
See http://www.nsandi.com/products/ilsc/index.jsp which give a return of 1.5% net of tax say 1.75% without tax deducted. For me to buy the level of pension for a 50% of a project officer salary would reuire a pension fund of HALF A MILLION POUNDS yes 500k.
To get a pension of 18k per year of the same value ir index linked would take somebody over the maximum threshold.
Most people pay into a pension fund and then have to buy an annuity which at present are giving a return of 2-3%. This would require a pension fund of 800k. Then there is the problem of inflation to be taken into account which is low at the moment but has been known to be 15%.
So a to get the 20k a year pension would mean a contribution of 4k per year for 35 years (growth at 9% & ignoring inflation) for annuity and 5k for index linking.
Translate that into a charge out and that will be the difference between being competative and not being competative.
If you are self employed pensions are a major downside because you have to save such huge amounts of money to face a decent retirement or keep on working.
In my case many years of working without even my NI being paid for or being in a pension fund makes matters worse.
Peter Wardle
(Showing his age by being worried about pensions.
Looking at the accounts Uo1 posted there are some serious funding issues for the pension funds. (The FTSE only fell 0.5 of a point today). Archaeological organisations are no different to others.
There is a basic statement pension for everybody provided that you have paid the stamps (NI contibutions).
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 and I read somewhere that this was going to cost every household something like 40k in extra taxes.
OK lets consider the real monetary value of a LPA pension paying 50% of a final salary and how much it would cost me to buy a similar product.
See http://www.nsandi.com/products/ilsc/index.jsp which give a return of 1.5% net of tax say 1.75% without tax deducted. For me to buy the level of pension for a 50% of a project officer salary would reuire a pension fund of HALF A MILLION POUNDS yes 500k.
To get a pension of 18k per year of the same value ir index linked would take somebody over the maximum threshold.
Most people pay into a pension fund and then have to buy an annuity which at present are giving a return of 2-3%. This would require a pension fund of 800k. Then there is the problem of inflation to be taken into account which is low at the moment but has been known to be 15%.
So a to get the 20k a year pension would mean a contribution of 4k per year for 35 years (growth at 9% & ignoring inflation) for annuity and 5k for index linking.
Translate that into a charge out and that will be the difference between being competative and not being competative.
If you are self employed pensions are a major downside because you have to save such huge amounts of money to face a decent retirement or keep on working.
In my case many years of working without even my NI being paid for or being in a pension fund makes matters worse.
Peter Wardle
(Showing his age by being worried about pensions.