Government coming for our Pensions

[milly]

An extremely alarming development whereby occupational Pensions are being asked to invest Pension funds into highly risky Business startups of which no doubt will have connections to our corrupt Politicians and their friends in the City.
I read somewhere that Business startups have a 90% failure rate.
Hopefully someone will be along to debunk this as a conspiracy theory

https://www.theguardian.com/business/20 ... k-startups

[RobertT]

Considering DB pensions are required to pay out a pension based on wages and length of service, this shouldn't affect those benefits any more than being invested in gilts.

Although DC pension savers may be more affected, which could be for the better or worse!

The 90% failure rate is for American start ups. The UK rate is around 60%, which is equal to the global average.

The Chancellor says, this is a way of increasing returns for pensioners. Postie says, it'll all end in failure.
A recurring theme......

[milly]

Considering DB pensions are required to pay out a pension based on wages and length of service, this shouldn't affect those benefits any more than being invested in gilts.

Although DC pension savers may be more affected, which could be for the better or worse!

The 90% failure rate is for American start ups. The UK rate is around 60%, which is equal to the global average.

The Chancellor says, this is a way of increasing returns for pensioners. Postie says, it'll all end in failure.
A recurring theme......

Our Pensions fund insane and wasteful Government spending by buying their risky debt and now they have decided that our Pensions can invest in some highly risky Dragon's Den type investments.
So you would happy for our Pension to put our hard-earned money into investments with a 60% failure rate?
"The Chancellor says, this is a way of increasing returns for pensioners"
Another recurring theme is your "appeal to authority fallacy" you must be one of the only people in the Country to think Jeremy Hunt is to be trusted.

[RobertT]

The RMPP is currently invested heavily in gilts – too heavily in my opinion.
There was a time it was invested around 83% in equities if I remember correctly – also too high!
Jeremy Hunts plans involve just 5% of pension cash to be invested in start-ups!

You have to begin somewhere and many highly successful companies were start-ups once. Amazon, Facebook, Google, etc.

But you only need to ask anyone who's ever invested any money, to know you're always going to have a few failures. Even Warren Buffet has had a few over the years.
It's life, there's no such thing as the perfect 100% dead cert!

I suppose it depends on the type of business to some degree, but the potential gains of one start-up success, can be much higher than the losses of many others.
Dragons Den is a good example! Peter Jones and Richard Farleigh put £50k into Reggae Reggae Sauce, in return for a 40% stake.
The creator, Levi Roots, is now worth about £30 million. So those Dragons have made a nice profit too – around £10 million each!
The equivalent of 200 failures, at £50k a pop.

A 60% failure rate still means there's potential to make good money.

[milly]

The RMPP is currently invested heavily in gilts – too heavily in my opinion.
There was a time it was invested around 83% in equities if I remember correctly – also too high!
Jeremy Hunts plans involve just 5% of pension cash to be invested in start-ups!

You have to begin somewhere and many highly successful companies were start-ups once. Amazon, Facebook, Google, etc.

But you only need to ask anyone who's ever invested any money, to know you're always going to have a few failures. Even Warren Buffet has had a few over the years.
It's life, there's no such thing as the perfect 100% dead cert!

I suppose it depends on the type of business to some degree, but the potential gains of one start-up success, can be much higher than the losses of many others.
Dragons Den is a good example! Peter Jones and Richard Farleigh put £50k into Reggae Reggae Sauce, in return for a 40% stake.
The creator, Levi Roots, is now worth about £30 million. So those Dragons have made a nice profit too – around £10 million each!
The equivalent of 200 failures, at £50k a pop.

A 60% failure rate still means there's potential to make good money.

Pensions should never be in the business of speculating on investments with a 60% failure rate even if only 5% of the Pension funds can be invested, Sorry I mean gambled.
You can cherry pick those success stories all you like but they are outliers.
Referencing Unicorn investments such as Amazon, Google and Facebook is beyond stupid, in justifying Jeremy Hunt's Pension grab.
We all know where the money will end up, in the hands of the Friends of the Politicians.

[RobertT]

Every investment is a gamble, whether that's in equities, gilts, property, gold, etc. Some obviously have more risk than others.

Presumably, those with DC pensions will still be able to pick their own investments and aren't compelled to go the Dragons Den route.

DB schemes will still be funded by first their assets, second by their sponsoring employer and ultimately by the PPF.

FB, etc are genuine success stories however rare they may be. Nothing stupid about that at all.

You always seem very keen to moan about this or moan about that, but that's all you do!
You seem to have very little in the way of alternatives.
Where would you like to see our pension invested?

You're obviously anti establishment, fair enough. But just because they might get something from it, doesn't necessarily mean the ordinary working man/woman won't aswell.

[milly]

Every investment is a gamble, whether that's in equities, gilts, property, gold, etc. Some obviously have more risk than others.

Presumably, those with DC pensions will still be able to pick their own investments and aren't compelled to go the Dragons Den route.

DB schemes will still be funded by first their assets, second by their sponsoring employer and ultimately by the PPF.

FB, etc are genuine success stories however rare they may be. Nothing stupid about that at all.

You always seem very keen to moan about this or moan about that, but that's all you do!
You seem to have very little in the way of alternatives.
Where would you like to see our pension invested?

You're obviously anti establishment, fair enough. But just because they might get something from it, doesn't necessarily mean the ordinary working man/woman won't aswell.

You seem to just be disagreeable for the sake of it.
I'm sure if I had said Jeremy Hunt's Pension grab was a good idea you would have said the opposite.

[RobertT]

You clearly like to post things just to get a reaction.

What are your investment alternatives?

[milly]

You clearly like to post things just to get a reaction.

What are your investment alternatives?

Probably something based on the Permanent Portfolio would be a steady alternative.

[RobertT]

Probably? So you come on here and spout your stuff and you haven't got a definite alternative!

A Permanent Portfolio is very vague in my opinion. It's supposed to perform well in all market conditions, but that's really what everyone wants!

I think you could ask every fund manager, trustee, etc to construct their own PP and they'd probably all come up with something completely different!

[milly]

Probably? So you come on here and spout your stuff and you haven't got a definite alternative!

A Permanent Portfolio is very vague in my opinion. It's supposed to perform well in all market conditions, but that's really what everyone wants!

I think you could ask every fund manager, trustee, etc to construct their own PP and they'd probably all come up with something completely different!

You asked I gave an answer!
Nothing vague about the Permanent Portfolio 25% Cash, 25% Gold, 25% Government Bonds and 25% Equities.
The Portfolio is rebalanced once a year in case any investment runs above this ratios.
There are variations of this Portfolio but the premise remains the same.

[RobertT]

That may be great for an individual wanting steady decent growth, assuming it does as it's supposed to.

I do think there's a too high dependency on gilts with the RMPP. But it's a closed DB scheme, so it doesn't really need to grow too much. It just has to keep pace with its liabilities. There won't be any more pension for us if the investments do really well, or any less if they don't!

I doubt we'll ever see a DB scheme with £billions being managed, with 25% holding of gold.

[milly]

That may be great for an individual wanting steady decent growth, assuming it does as it's supposed to.

I do think there's a too high dependency on gilts with the RMPP. But it's a closed DB scheme, so it doesn't really need to grow too much. It just has to keep pace with its liabilities. There won't be any more pension for us if the investments do really well, or any less if they don't!

I doubt we'll ever see a DB scheme with £billions being managed, with 25% holding of gold.

I doubt any Occupational Pension scheme will own any Gold, its a shame as it's done well over the past 2000 years.

[Wullie10]

Las Vegas was built on Union pension money... illegally but never mind that.

[RobertT]

Lol!