[smcl]

I had no idea, that's very eye-opening. When pension funds go underwater like this, what are the options? Do the council (or indeed any organisation) have any ability to renegotiate them if they are as "gold-plated" or outrageous as the Telegraph suggests?

[justincormack]

Not usually. Final salary schemes were considered normal, not "gold plated", and of course worked ok while average wages were rising, council revenues were rising, the stock market was rising, and interest rates were high (which makes the value of future liabilities lower). Now they are becoming a vast income transfer from poorer young people to well off old people. In the US bankruptcy has been tried, but not sure that is an option in the UK.

[branchless]

> vast income transfer from poorer young people to well off old

Hooray someone who gets it. How on earth did you escape the UK hive-mind?

Do you like how they put all the UK pension costs under the main "welfare" heading then demand benefit cuts (excluding pensions) because the welfare bill is too high?

Do you know anyone else in the UK who knows or cares about any of this?

[stegosaurus]

Heh.

I think essentially every young person in the UK realises this and cares deeply.

I have a bunch of middle class friends. Many of their parents started out, got a decent job, bought a house. House is now worth 500K+.

For us to ever obtain that (without inheritance; i.e. in the same way they did) we would have to earn over £100K, or have dual income of 70K, ish. That's 5% if not 1% territory; it's essentially limited to business owners/senior mgmt and bankers.

So everyone rents. Who are they renting from? Well, not young people.

Of course, all of this capital will flow down the generations eventually, but only to a select lucky few. It's as if we had a golden age; a few decades of mobility for people to work hard within; and now family wealth is basically crystallised.

[fennecfoxen]

> Final salary schemes were considered normal, not "gold plated",

These days defined-benefit schemes are "normal" in the US only for government employees. In the private sector, they were largely phased out in favor of defined-contribution pensions, decades ago, with only a few labor-union-negotiated holdouts. This is probably a good thing for workers whose employer may go out of business or go bankrupt some day (cough GM cough) in a way that governments theoretically shouldn't.

Meanwhile in actually-bankrupt US cities, look at Stockton, California... especially renowned for government employees working insane overtime in their final year to make final-salary calculations as impressive as possible.