Magazine article The Spectator

How Does This Pension Scheme Defy Gravity? Because You and I Prop It Up

Magazine article The Spectator

How Does This Pension Scheme Defy Gravity? Because You and I Prop It Up

Article excerpt

CITY AND SUBURBAN

Here's something: a pension scheme which seems to be defying gravity. A final-- salary scheme, too, meaning that your pension is linked, not to what the contributions could buy, but to what you were being paid at the end of your service. Employers great and small are scrambling to get out of these schemes and closing the doors to new entrants. Gravity has overtaken them. Pensioners and their dependants are living longer, investment returns have tailed off, and something like half of our hundred biggest companies will show deficits on their pension funds this year. This scheme, though, is positively expanding, for if you bump your contributions up from 1.5 per cent of your salary (which is the scheme's standard rate) to 3.5 per cent, you can now qualify for a Premium Pension. Retirement age for all is 60, but those with long service can hope to retire on full pension five years earlier. …

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