Feb 22 2007
WHAT SHOULD BE DONE TO RESCUE PENSION FUNDS?
The regulatory system is helping destroy what remains of our once great pension fund system.
A pension fund is like a bath with both taps on and the plug out. In a healthy growing fund money is pouring in from the investment tap, as the investments produce income and gains, and money is pouring in from the contribution tap, as members and the employer make their payments each month for future pensions. Money is also going out of the plug hole, as members retire and need pension payments.
The art is to keep enough money in the bath so it does not run out, until
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John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
‘Since 2002 stock markets have performed very well, and are now in the UK and US up to new high levels’
The spreadsheet I’ve just downloaded from Yahoo finance reckons the FTSE100 was 3940.4 on 2nd Jan 2003 and has grown to 6357.1 yesterday. The fact remains that on 4th Januray 2000 it was at 6662.9.
I’m a bit of a financial illiterate, but strikes me that if at the beginning of 2000 you had all your cash in long funds that mainly invest in UK equities you wouldn’t really have made any money over the last 6 years without selling up and migrating to bonds, or gold, or hedge funds, then back to equities at some point.