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129 comments on Grangemouth/Forties Update: Forties pipeline remains shut down (Thread 2)
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129 comments on Grangemouth/Forties Update: Forties pipeline remains shut down (Thread 2)
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It is no longer a realistic expectation for any workers to be granted a generous pension at age 60 when OECD life expectancy is now over 80.
Is it realistic to expect the average person's age to reach 80 anymore given what we know is coming soon?
They might as well just promise the pensions. So few will be around to claim them.
Rather like promising the drastic Co2 emissions cuts: it will be accomplished by PO anyway, might as well take credit for having 'legislated' it. [/cynicism]
One reason that final salary pensions have become unpopular in the UK is that the company has by law to have be putting aside enough money (into an independently controlled fund) so that it will be able to meet the projected obligations at the time they become due (underprevailing conditions assumptions on growth of any investments). So if forecasts for longevity are high and market returns currently low, there's a lot of cash that's got to be deposited now. If longevity forecasts go down in the future and market returns improve a bit so the fund is "in surplus" then companies are allowed to contribute less cash until balance is achieved, but that doesn't stop them having to contribute more money now based on current predictions.
So it's kinda the opposite of your thought: although pension funds won't need to be so high if PO leads to a large decrease in longevity, that happens in the mid-term future but as long as the experts are predicting increased longevity companies have to divert more money into a locked fund now.