From: "Nebulous" 
Newsgroups: uk.finance
Subject: Re: UK Government Debt
Date: Mon, 28 Feb 2005 05:38:32 -0000


"Ronald Raygun"  wrote in message
news:hNjUd.24515$8B3.7490@text.news.blueyonder.co.uk...
> Nebulous wrote:
>
> > I'm not sure about the cutting back- although it may become necessary in
> > the future. My understanding is that all pension rights already earned
> > will stay as they are, with future ones accruing on a diffferent basis.
>
> Interesting point, but what if it becomes necessary to cut back more
> than such a method would allow?  It's all very well to say that all
> years before (say) 2015 count on an 80ths basis, and all years after that
> count on a 160ths basis, or even not at all, but that might *still* not
> leave enough in the kitty.
>
> It's important to establish first of all whether any cutting back is
> legally possible *at all* before arguing about how much.  I suspect
> the only realistic cutting back is at the stage where people first
> enter into pensionable employment.
>

Its possible to close schemes to new entrants. Its also possible to close a
scheme altogether, either replacing it with something different or leaving
them with nothing at all. I looked at the detail some time ago and seem to
remember the intention was to open a new scheme, with people being
encouraged to transfer their service across. As people who leave schemes
early and do not transfer out do not seem to get a good deal it may be that
best advice will be to transfer.
From memory I think the proposal was to move to 60ths, of average lifetime
earnings though, rather than best/last few years. The thing that has created
most hassle so far is the expectation that pensions are not payable until
65, without scaling back. At the moment you can get many public sector
pensions at 60.

Neb