Very helpful Rob thank you.
Having read both links I am less enthusiastic than I was before. 100% of contribution will be put in Return Seeking Assets until you reach your nra of 67. Given the points below:
Firstly, stock markets have been in the longest continual bull market in a long, long time.
Secondly, US treasuries are in an inverted yield curve. Every time this has happened in the last 100 years the US has gone into recession within 18 months.
Thirdly, there is an 19 trillion dollar bond bubble in the US, which at some point will have to have the air taken out of it or it will burst.
Fourthly, a lot of government treasuries around the world are in negative yield territory. Germany, Japan etc.
Fifthly, US banks are in a more leveraged position than they were in 2008. European banks are in a very fragile position, look at Germanys biggest bank.
What happens when the next crash takes place? 3 years of continual reduction in pensions?
How much security of income will there be with this CDC scheme given that no buffer will be built up, all problems will be dealt with at the time?
Plus the contribution level is going down from 19.6% to 15.2%, if you are luck enough to be in section B or C. It’s even marginally reducing for members in the DC scheme from a top of 16% down to 15.2%.
What people want in retirement is security I don’t see how this scheme gives people that. This will not effect me too much as I’m not far off the promised land of retirement...... but people in there 20s and 30s I wish them the best of luck.
All things taken into account I would rather stay with the interim arrangements at least you have a guarantee with that.... assuming RM doesn’t go bust of course!