Fundamentally, there is nothing flawed about paying a stream of tax-relieved money into a largely tax-free environment that will, in due time, provide a tax relieved cash sum and/or a stream of taxable income. Where is the fundamental flaw in that? It is, in fact, too good to be true. However, endless succession of government tinkering to engineer social conditions where the welfare state is relieved of liability has had the opposite effect. The welfare state is increasingly meeting the needs of people who would have once been provided for by their employers.
I voted No as I can't see pension is fundamentally flawed.
The assumptions (or basis) used in pension valuations are inappropriate or flawed or too optimistic with hindsight like David talked about above. The basis itself is however not pensions.
Pensions provides a means to a retirement income security - this can't be a flaw in my view.
The idea of pooling and sharing risks (i.e. DB arrangements) is fundamentally sound.
I think pensions are flawed in their current form.
The entire pension model has been based on assumptions that the last 50 years of growth and boom post Western industrialisation and recovery from several large scale wars was indicative of economic growth ad infinitum.
It was a foolish assumption before 2008 when the markets went wobbly.
It is still foolish to project into the future with altered models that fail to take into account financial crises themselves, wars, natural disasters and a huge number of other variables.
Even the finest stochastic modelling for future growth over the span of a pension is so heavily filtered with regards to the data they use that they are basically rose tinted approximations.
Take away wars, financial crises, natural disasters. All these things are considered too disruptive to be able to project reliably. Unfortunate then that all these things probably do happen over the saving lifetime of the average person.
Pensions will only make sense when they are in essence a special kind of personal savings account that attract benefits intended for improving the value of accounts which people intend to use for sustaining themselves in later life.
How can we expect people to save for life beyond work when what is on offer is often no better than an ISA if it were not for the government incentive?
If pensions can't be competitive over straight ISA's without government incentives, which we ultimately pay for any way during our working lives, then surely that is a sign pensions are inefficient somewhere?
Surely a pension if it is worth the time, should be performing way beyond ISA's before you start to add on the government incentives?
Will the salary sacrifice tax avoidance scheme be closed up and classed as evasion?
What will future taxation levels be, might they be a 50% flat rate making the tax-free investment in pensions today seem pointless and bad value vs a taxed investment ISA today?
Will legislation change in the future making pensions have to be taken later and later as the crisis grows? Will those with non-pension funds be free from having their retirement dates pushed back?
Might we be living in a neo-communist European state where we don't need a pension?
I'm 32 and with 35+ years to retirement all these things are going through my mind. They are all relevant and important in my view.
I don't believe we will experience the same economic and social stasis the last 60 years has been lucky to offer us.
I'm being open minded about the future, and I simply want flexibility. Pensions don't offer that. They offer uncertainty!