More scares about 'black holes' on 'Today' today. Can anyone advise please
on the following:
1. Is there an accepted way of calculating pension-fund 'black holes'? (I
understand that the general idea is to compare today's value of future
liabilities against today's value of assets held. Thus it varies daily with
the stock market and long-term with demographic estimates.)
2. _Should_ there be an accepted way of calculating black holes?
3. Should there be an accepted way of reporting such things? (e.g. today's
report was a black hole of 30 billion UKP affecting 4.5 million workers:
this looks like about 7000 UKP per worker which may be 7 UKP per worker per
week of retirement. A different black hole may be larger or smaller, but
surely it is the _proportional_ deficit which should ring alarm bells?)
4. Why are there so many pension-fund panic reports? Apart from press
paranoia, it seems to be due to rapid changes in the asset market combined
with perhaps a long-term tendency to under-estimate longevity. Are there
other major factors?
5. I'm also interested in the gender and class divide. Women live longer -
so is their black hole bigger? Also, the state pension must transfer from
those who die early (e.g. males & the poor) to those who die late.
JOHN BIBBY
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