Some of our pensioners are unwell

I’ve  not  read anything so silly as this  http://www.professionalpensions.com/professional-pensions/news/2105510/stv-slashes-liabilities-bespoke-mortality-exercise for a long time.

If you can’t read the story via the link, KPMG are delighting in having got the STV Trustees to change their mortality assumptions after they’d collected eveidence that most of its pensioners are likely to live a lot shorter than would normally be expected. The result of this is that scheme liabilities have been restated as £5m lower than previously.

NB!  The liabilities have not changed- they have simply been re-valued.

Are KPMG really claiming they have reduced the Scheme liabilities by £5m? They have done nothing of the kind.. The Trustees have the same financial obligations to the same people as they had a year ago when this expensive “exercise” began.  All that KPMG has done is bag the glory for some hard work by a firm of advisers who I have a great deal of time for and net a fat fee in the process.

The fat fee will of course be paid by the sponsor STV with money that otherwise could have gone to beefing up the Recovery Plan of its Pension Scheme.

There is something very distasteful about the relish with which KPMG announce that they have uncovered  poor health and life expectancy among Scottish Televisions pensioners . Perhaps someone should remind them that the reason the pension scheme was set up in the first place was to give financial comfort to these people.

If I was one of the pensioners who had been given a £50 M&S voucher to reveal my true state of health, I’d be feeling pretty hacked off reading

It’s a win-win situation,” he said. “The company is stronger because its liabilities are reduced, trustees improve their governance because they increase the accuracy of their data, and it doesn’t affect employee benefits.”

Whatever next?   Press releases such as this?

We are delighted to announce the further de-risking of our pension plan following another untimely death. The trustees continue to strive for the premature termination of ongoing liabilities and will keep the company and its shareholders appraised of any further fatalities.

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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