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Can you explain in very simple terms how you think they are doing this?
I bet you wish you'd never asked?
Meanwhile, the latest funding figures for UK DB pension schemes have been released, and as I suggested up thread, their joint funding position has improved as a result of higher gilt yields. With around 90% of schemes sharing a surplus of the best part of half a £Trillion. https://www.pensionsage.com/pa/DB-pensi ... tember.php
Please explain how higher Gilt Yields don't lead to a drop in the value of Pension assets?
The article that you have posted appears to refer to Gilts bought over a time frame of a couple of months.
Have a look on Hargreaves Lansdown at Gilt Fund performance over the past 2 years, it's pretty horrible.
HL offer funds mainly via an equity ISA or a SIPP, which is a type of DC pension. And I'm not surprised their performance has been horrible.
But as I've previously said on here, gilt yields have affected DC and DB pension schemes differently.
Horrible performance in an ISA or SIPP, actually means DB schemes in general, have been quids in.
The PPF release their estimated funding position of the UK's DB pension schemes on a monthly basis, so the article I linked to above is just comparing this months figures to last. In practice, and as I'm sure you know, the rise in yields has happened over a longer period. The improved funding position of DB funds has largely correlated with that period. https://www.ppf.co.uk/ppf-7800-index
HL offer funds mainly via an equity ISA or a SIPP, which is a type of DC pension. And I'm not surprised their performance has been horrible.
But as I've previously said on here, gilt yields have affected DC and DB pension schemes differently.
Horrible performance in an ISA or SIPP, actually means DB schemes in general, have been quids in.
The PPF release their estimated funding position of the UK's DB pension schemes on a monthly basis, so the article I linked to above is just comparing this months figures to last. In practice, and as I'm sure you know, the rise in yields has happened over a longer period. The improved funding position of DB funds has largely correlated with that period. https://www.ppf.co.uk/ppf-7800-index
Gilts are Gilts and it's irrelevant what type of scheme they are in.
There is no way on Earth that rising Gilt yields can be good for the value of a Pension scheme unless you have bought them recently.
The Gilts bought over the past few years have been very poor investments.
I appreciate it might be counter intuitive and not the easiest thing to get your head round.
If you look at the earliest link on the PPF site, DB pensions had a combined surplus of £81 Billion in November 2021, which has risen to £447 in the most recent figures.
That has coincided with the rise in gilt yields.
The majority of DB schemes are invested heavily in gilts.
You've been going on for months about DB schemes and the RMPP in particular, being in deep sh!t due to their investment strategy. When in practice, the opposite has been true.
Just because you don't understand, doesn't mean it's wrong!
I appreciate it might be counter intuitive and not the easiest thing to get your head round.
If you look at the earliest link on the PPF site, DB pensions had a combined surplus of £81 Billion in November 2021, which has risen to £447 in the most recent figures.
That has coincided with the rise in gilt yields.
The majority of DB schemes are invested heavily in gilts.
You've been going on for months about DB schemes and the RMPP in particular, being in deep sh!t due to their investment strategy. When in practice, the opposite has been true.
Just because you don't understand, doesn't mean it's wrong!
So what happens if Gilt yields go down?
Considering many Pension schemes were on the verge of imploding in September 2022 due to the mini-budget which caused Gilt yields to spike, forcing the Bank of England to rescue Pensions I find it hard to believe that higher Gilt yields are a benefit.
The IMF has recently forecast that the B of E base rate will peak at 6% and not fall below 5% before 2028.
I don't think you need to worry about the coupon on gilts dropping anytime soon.
As DB pension fund held gilts mature they will be reinvested in the higher yielding gilts over next few years. Thereby solidifying their funding base.
Probably not good news if you are a gold bug though.
The IMF has recently forecast that the B of E base rate will peak at 6% and not fall below 5% before 2028.
I don't think you need to worry about the coupon on gilts dropping anytime soon.
As DB pension fund held gilts mature they will be reinvested in the higher yielding gilts over next few years. Thereby solidifying their funding base.
Probably not good news if you are a gold bug though.
Considering none of these esteemed institutions could see inflation coming, I wouldn't pay much attention to them.
As for Gold, unless we have positive real interest rates then it will continue to be a solid investment.
I appreciate it might be counter intuitive and not the easiest thing to get your head round.
If you look at the earliest link on the PPF site, DB pensions had a combined surplus of £81 Billion in November 2021, which has risen to £447 in the most recent figures.
That has coincided with the rise in gilt yields.
The majority of DB schemes are invested heavily in gilts.
You've been going on for months about DB schemes and the RMPP in particular, being in deep sh!t due to their investment strategy. When in practice, the opposite has been true.
Just because you don't understand, doesn't mean it's wrong!
So what happens if Gilt yields go down?
Considering many Pension schemes were on the verge of imploding in September 2022 due to the mini-budget which caused Gilt yields to spike, forcing the Bank of England to rescue Pensions I find it hard to believe that higher Gilt yields are a benefit.
The potential implosion of DB schemes was specific to LDI, and not the gilt market as a whole.
Some schemes were more heavily invested in those Liability Driven Investments than others, and so it was those schemes that were more affected by the spike in gilt yields.
In simple terms, they were forced to sell at the worse possible time. That in turn created turmoil, which the BoE stepped in to control.
I appreciate it might be counter intuitive and not the easiest thing to get your head round.
If you look at the earliest link on the PPF site, DB pensions had a combined surplus of £81 Billion in November 2021, which has risen to £447 in the most recent figures.
That has coincided with the rise in gilt yields.
The majority of DB schemes are invested heavily in gilts.
You've been going on for months about DB schemes and the RMPP in particular, being in deep sh!t due to their investment strategy. When in practice, the opposite has been true.
Just because you don't understand, doesn't mean it's wrong!
So what happens if Gilt yields go down?
Considering many Pension schemes were on the verge of imploding in September 2022 due to the mini-budget which caused Gilt yields to spike, forcing the Bank of England to rescue Pensions I find it hard to believe that higher Gilt yields are a benefit.
The potential implosion of DB schemes was specific to LDI, and not the gilt market as a whole.
Some schemes were more heavily invested in those Liability Driven Investments than others, and so it was those schemes that were more affected by the spike in gilt yields.
In simple terms, they were forced to sell at the worse possible time. That in turn created turmoil, which the BoE stepped in to control.
I can remember a few years back i was looking at a £ 7k pension forecast the latest ones looks like i'll be lucky to clear 4k,what i want to know is where has all the money gone.
I can remember a few years back i was looking at a £ 7k pension forecast the latest ones looks like i'll be lucky to clear 4k,what i want to know is where has all the money gone.
There are three main reasons why you thought RMPP statements in the past were higher.
1. The way pensions accrued changed in 2008, from final to average salary.
2. Statements used to give a prediction of what you'd get if you worked until NRA. From around 2015/16 I think(not sure without checking), they changed to what you'd accrued up to that point.
3. Everyone in the RMPP stopped accruing pension in 2018, since then you've been building up a lump sum via the DBCBS. You won't start accruing more pension until the new CDC scheme starts.
I can remember a few years back i was looking at a £ 7k pension forecast the latest ones looks like i'll be lucky to clear 4k,what i want to know is where has all the money gone.
There are three main reasons why you thought RMPP statements in the past were higher.
1. The way pensions accrued changed in 2008, from final to average salary.
2. Statements used to give a prediction of what you'd get if you worked until NRA. From around 2015/16 I think(not sure without checking), they changed to what you'd accrued up to that point.
3. Everyone in the RMPP stopped accruing pension in 2018, since then you've been building up a lump sum via the DBCBS. You won't start accruing more pension until the new CDC scheme starts.
I know we have been well and truly screwed,another union failure.
I can remember a few years back i was looking at a £ 7k pension forecast the latest ones looks like i'll be lucky to clear 4k,what i want to know is where has all the money gone.
There are three main reasons why you thought RMPP statements in the past were higher.
1. The way pensions accrued changed in 2008, from final to average salary.
2. Statements used to give a prediction of what you'd get if you worked until NRA. From around 2015/16 I think(not sure without checking), they changed to what you'd accrued up to that point.
3. Everyone in the RMPP stopped accruing pension in 2018, since then you've been building up a lump sum via the DBCBS. You won't start accruing more pension until the new CDC scheme starts.
I know we have been well and truly screwed,another union failure.
With 5 years DBCBS and almost 20% combined contributions per year that will be the equivalent of a years pensionable pay for most people. That will likely cover the entire lump sum amount for NRA65 with cash to spare so hardly screwed.
I can remember a few years back i was looking at a £ 7k pension forecast the latest ones looks like i'll be lucky to clear 4k,what i want to know is where has all the money gone.
There are three main reasons why you thought RMPP statements in the past were higher.
1. The way pensions accrued changed in 2008, from final to average salary.
2. Statements used to give a prediction of what you'd get if you worked until NRA. From around 2015/16 I think(not sure without checking), they changed to what you'd accrued up to that point.
3. Everyone in the RMPP stopped accruing pension in 2018, since then you've been building up a lump sum via the DBCBS. You won't start accruing more pension until the new CDC scheme starts.
I know we have been well and truly screwed,another union failure.
With 5 years DBCBS and almost 20% combined contributions per year that will be the equivalent of a years pensionable pay for most people. That will likely cover the entire lump sum amount for NRA65 with cash to spare so hardly screwed.
You must be reading a different amount of figures to me,because that is not what im reading,the figures are manipulated and doesn't matter how it is dressed up the postie is losing not just in pension in everything aided and abetted by the CWU.
I can remember a few years back i was looking at a £ 7k pension forecast the latest ones looks like i'll be lucky to clear 4k,what i want to know is where has all the money gone.
There are three main reasons why you thought RMPP statements in the past were higher.
1. The way pensions accrued changed in 2008, from final to average salary.
2. Statements used to give a prediction of what you'd get if you worked until NRA. From around 2015/16 I think(not sure without checking), they changed to what you'd accrued up to that point.
3. Everyone in the RMPP stopped accruing pension in 2018, since then you've been building up a lump sum via the DBCBS. You won't start accruing more pension until the new CDC scheme starts.
I know we have been well and truly screwed,another union failure.
With 5 years DBCBS and almost 20% combined contributions per year that will be the equivalent of a years pensionable pay for most people. That will likely cover the entire lump sum amount for NRA65 with cash to spare so hardly screwed.
You must be reading a different amount of figures to me,because that is not what im reading,the figures are manipulated and doesn't matter how it is dressed up the postie is losing not just in pension in everything aided and abetted by the CWU.
On your RMPP statement look at two figures.......your DBCBS amount and your final pensionable pay. The cash balance should now be more than your pensionable pay......and given the statement is to March and it's now October it's also less than the level you will actually get.