Since the 2008 decision in Gregson v HAE Trustees Limited, individual trustees and directors of a corporate trustee are no longer exposed to the same risk. While a member will find it difficult to sue the directors of a corporate trustee of the pension scheme, it would be much easier to pursue individual trustees. Even the best run schemes expose individual trustees to risk and trustees are unwise not to take action to reduce their risk exposure in this area especially given a number of recent legal cases – Greenup & Thompson, Ashridge Ltd and Kemp vs Sims – all of which have seen trustees, who were also company directors personally fined for their actions. Read more »
Posts by David
News reaches me that the Pensions Trust, who provide a multi-employer pension scheme covering 100’s of small charities and not for profit organisations has decided to close the scheme for all future benefit accrual from April 2010.
Now I’ve been banging on for a number of years about the headaches this scheme has been causing small charitable bodies (frequently without them even knowing about them!!). Read more »
Specialist actuary, Spence & Partners, have updated their highly successful Life Expectancy calculator and added it to their website . The calculator provides estimated life expectancy for single and joint lives and has been widely used by financial advisers to assist in evaluating life expectancy for their clients as part of the process of establishing cash flow requirements in retirement. Read more »
I got a letter this week from Aviva about a pension policy I’d had for years – long before they employed Bruce Willis to do their adverts and were called plain old Norwich Union. They were very kindly checking that I was still the same person but just living at a different address. This got me thinking about just how easy it is to lose track of pension benefits and how important good record keeping in schemes actually is.
It is however generally an area that’s really undervalued with very little resource being committed to ensure that the primary purpose of a pension scheme – namely to pay the right benefits to the right member at the right time – is achieved. Hopefully the increased attention being paid by the Pensions Regulator to record keeping will encourage everyone involved to treat it a little more seriously.
With the announcement this week that Barclays is abandoning final salary pension provision for its staff following hot on the heels of the decision taken by BP not to offer this option to new staff we really are beginning to witness the end of DB pension provision in the UK.
We’ve also recently witnessed Rentokil, WH Smith and Fujitsu all taking similar decisions and BT announcing fundamental changes to their benefit structure. Interestingly BP shareholders simply did not want to continue support for the scheme which is not at all surprising given the level of risk exposure and its transparency in the companies financials.
These issues are even starker for small employers and we’re witnessing and even quicker pace of change in that sector. If you find yourself in this position why not visit our Pensions Endgame section to see what options are available to you.
As John McEnroe used to say – you cannot be serious!!!
At a conference last week Minister for local government John Healey described DC pensions as “cheap shot pensions” for public service staff, his rationale being that they would cost the country more for low earners.
Is it just me or does this show a fundamental level of double standards equivalent to parliamentary expenses. Read more »
In a recent article John Healey, Minister for Local Government suggested that the local government pension funding black hole was a myth and that these schemes would not cost tax payers more.
I wonder where he thinks the money will come from? Maybe quantitative easing has actually made him think that money can be made out of thin air.
Or maybe he thinks the expenditure can just be claimed for on expenses!!
Thought it was interesting that Credit Suisse, an investment bank, is involved in the Babcock longevity swap. Given the sectors performance in relation to collateralised debt instruments (synthetic or otherwise) and credit default swaps (and you would think a bank might understand the risks associated with debt and credit default!) how confident are we that they understand the risks associated with longevity? (not an area banks have claimed expertise in the past). No doubt they have very sophisticated financial models in place and everybody understands the detail behind the contract…… Read more »
Pinsent Masons have garnered a bit of press recently for their survey re the intentions of currently open final salary schemes to close or not. The accompanying headline was “Survey shows “death” of final salary schemes premature” and mentioned that out of 200 schemes surveyed none were planning to close.
This is very much at odds with my experience of schemes, admittedly in the SME Sector. It did find that a large percentage of schemes were tinkering with accrual or contribution rates or flirting with CARE schemes, or rearranging the deckchairs on the Titanic as I think it should be known. None of those putative solutions really addresses the fundamental risks associated with Defined Benefit schemes. I have seen a number of companies who had tried such solutions eventually come to us to help them close their scheme as the tinkering hadn’t helped. Such solutions are clearly in the interests of consultancies with large numbers of actuaries and other professional staff to keep gainfully employed but are they in their clients interests? Read more »
Spence & Partners Limited, who are fast building a reputation as a dynamic and progressive force in the actuarial and pension consulting market in Scotland and Northern Ireland, have managed to secure the services of Ian Campbell, BSc, FFA, a senior actuary with decades of experience at the highest level of the profession.
His appointment as director responsible for actuarial services enhances the strength, gravitas and professional integrity of the Spence & Partners team which, under Managing Director Brian Spence, has built up an unrivalled reputation in a fiercely competitive sector. Read more »