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Wednesday, June 28, 2017

Beware Zombie Pension Companies


A prescient warning in the Telegraph wrt pension schemes that might go bust:
"There are 10 million people in 6,000 “defined benefit” pension schemes in Britain. Most of them will get the pensions they expect in full – but not all.

If the companies behind these schemes are financially strong enough still to be in business when the pensions come to get paid, then all is well. However, around 1,000 schemes, possibly with as many as 1.7 million members, are in a very precarious position with financially weak companies behind them or large deficits - sometimes both.

Their members face a real and current risk that their companies will go bust. If this happens their scheme will almost certainly fall into the Pension Protection Fund (PPF). This will ensure that they still get a pension, but it will be lower, at around 90pc of what they were expecting."
A pension is meant to cover you from retirement through to death, which may be 30 years or so from the date of retirement.

How the hell can anyone predict what the world will look like 30 years from now?

Scary isn't it?

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