When I first started writing these blogs I mainly wrote about property related topics but did write on other topics, such as credit rating agencies.
A few months ago I decided that I would limit all my blogs to property. However, this blog is going to break that rule because I feel there is a lot of comment about pensions at the moment and wanted to add my bit.
The government last week were commenting on pensions – to be more specific private pensions. Many people were up in arms about this, they were saying that the government should not meddle and they have enough of their own problems with public sector and state pensions.
However, many future pensioners who are today paying into their private/company pension schemes are planning on the basis that they will be ok when they retire as they are contributing regularly. However, when you look at private pension funds the picture is not so rosy. Look at British Airways with a large pension deficit – many billions of pounds, and the recent events at BP – a company they seemed so solid is having major difficulties – how will this effect their employees pensions?
Yes there are actuaries who carry out complicated calculations which assist with valuations, and there are accounting standards (FRSs) which give guidance – in the same way as there are credit rating agencies that were meant to give confidence on investments pre credit crunch?
So I think it is good that the government are looking at this. I am not saying whether their current thinking is right or wrong, but it is an area that needs controls.
Years ago when Equitable policyholders found our their retirement income was reduced who did they expect to fill the hole – the government via the taxpayer – as happened recently with the banks . . .see the similarities?