Wednesday, April 8, 2009

Irregular Pensions

When we moved to France in 1977, pensions were not on our priority list.
Now, they are.

Back then, we vaguely hoped that by the time we needed pensions, western governments & companies and civilization in general would have progressed to the point of taking international mobility into account.
We were certainly guilty of not taking the subject seriously enough and of not keeping our eye closely enough on European developments.
I would advise anybody anywhere to be more watchful than we have been.

So it is with considerable relief that I can now report that Europe does work, more or less, for wandering workers.
UK & French pension authorities do work together, do construct a multi-national working career, do decide that the whole thing is worth a full pension & do decide to each pay their share of a reasonable whole pension.
They even pay it in Euros into a French bank account.
Employers' pensions don't work quite as well, but better than might have been feared.

For us, it did not just happen automatically though.
I seriously woke up to the question 6 months before retirement date and a big multi-page XL spreadsheet shows 153 items of correspondence so far, with the various potential pension providers, most of whom had changed names, addresses, phone numbers etc since previous contacts.
Today's situation is that we have actual cash in the bank from 3 providers & reliable-looking promises from a fourth, so we can at last start breathing more easily again.

That situation is so good, compared with what it might have been, and compared with the sad plight of all the people currently losing jobs & in some cases associated pensions, that the following remarks should be taken as academic quibbles & certainly not as moaning complaints.

The combined state & employers' pensions should be enough to live on, carefully rather than comfortably.
That implies keeping a regular, careful eye on income, expenditure & balance.
No problem – I have done a monthly account for at least 20 years.
During that time, the main income (salary) & the main expenses (credit card) happened predictably on fixed dates each month, so it was easy to see at a glance whether the month was positive or negative and to react when necessary to stop trends developing.

That control will be more necessary with a pension income.
But will not be so easy.
French state pension is paid into the French bank in Euros on a fixed date monthly, as you would expect.
French employer's pension is paid into the French bank in Euros, but quarterly.
UK state pension will be paid into the French bank in Euros, but every 4 weeks, not monthly.
It is obviously defined in Sterling & I don't yet know what kind of exchange & transfer rates they will achieve.
UK employer's pension is paid monthly, but only in Sterling & only into a UK bank account, from where shipping to France will cost relatively more with increasing frequency & with my poor bargaining position with banks, bless their little hearts!
So keeping track of creeping deficits is going to be difficult, just when it gets more critical.

Again, I am not asking anybody to feel sorry for me here, just pointing out that there are some obviously better & some obviously worse ways of paying pensioners, and I wonder why 3 out of 4 providers would choose an apparently worse way.

Parting thot: "Happiness is proportional to rate of improvement of material circumstances."

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