![]() ![]() Most defined contributions schemes will not result in members getting adequate benefits when they retire. Properly run and regulated defined benefit pension schemes are as affordable today as they have ever been. The Pension minister Steve Webb promised to do something about what he called this “nightmare” which is “killing” perfectly good pension schemes and that he would “not idly stand by” and let this happen. The government has committed to act on this issue but has just failed to do so. This has meant that pension schemes appear to have high deficits when in fact this has nothing to do with their underlying strengths or weaknesses. ![]() Due to the abnormal economic conditions these gilts currently have negative returns and are at a 200 year all time low. Schemes usually have to price their costs according to the return on Government loans called gilts. It is well known that due to outdated and deficient rules called “Mark to Market” accounting, the “costs” of defined benefit pensions have risen in a totally artificial manner. This is a completely nonsensical argument. The reasons given for taking this action by SHPS and the Pension Trust are that they must protect the fund against rising “pension liabilities”. This will make them unaffordable and members will be forced to leave the schemes which may in turn then fail. They are also trying to massively increase pension contributions to such an extent that many employers are planning to close schemes to future service or pass on these contribution rises onto members. That the Social Housing Pension Fund (SHPS) and the Pension Trust have announced plans to discourage many community employers from offering a decent defined benefit scheme to our members. Conference 2013 Community Service Group Conference Date 23 November 2012 Decision Carried as Amended ![]()
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