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Old 11-16-2014, 04:22 PM
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Mary Pat Campbell
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Join Date: Nov 2003
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UNITED KINGDOM

http://www.telegraph.co.uk/finance/p...ked-yours.html

Quote:
There is great irony in the fact that Britain’s most lavish occupational pension scheme is operated by the one institution that bears the blame for wrecking everyone else’s retirement finances.
I’m talking about the Bank of England.
Its staff pension scheme, which would be eye-catchingly generous in any circumstances, stands out as a gross anachronism – an error of judgment, a crass insensitivity – in these post-crisis years when the finances of states and households everywhere are so stretched.
No pension scheme of any comparable organisation (there are 12,500 beneficiaries of the Bank’s scheme, including retired staff) is as sumptuous. For a start, around 1,100 current staff are still building up benefits in a final-salary (or “defined benefit”) type of scheme, where retirement incomes are paid in relation to the member’s leaving wage. And staff don’t pay a jot from their own earnings – the Bank pays every penny.
Final-salary pensions are the most valuable type for workers, but for employers they are the most onerous. Pensions under these schemes are usually pledged to rise in line with inflation. That adds huge costs and risk. As a result, final salary-type pensions have all but died in the private sector.

In the public sector, though, they remain a force. In March this year, as we reported, government statistics showed the likelihood of any employee belonging to a final salary-type scheme was a staggering 10 times higher in the public than the private sector.
Setting aside the rise in longevity, one of the factors most to blame for the death of these generous schemes in the private sector has been the fall in the long-term returns on bonds. And “quantitative easing” – the Bank’s programme of money-printing initiated in 2009 in an attempt to jump-start the economy – is the prime cause.
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