BSPS – a big win – but at what cost?

BSPS Missing.PNG

Despite the success, many members of BSPS will be “missing” from the new scheme

 

It now seems quite certain that the New British Steel Pension Scheme will happen and that it will be populated by the majority of members of the current British Steel Pension Scheme. In announcing the results of “Time to Choose” Allan Johnston, Chair of BSPS Trustees had this to say.

I am pleased that so many Scheme members took the time to choose the outcome that was best for them based on their personal circumstances. The New BSPS offers benefits that for most members are the same or better than the PPF and around 83,000 members have chosen to switch to the New Scheme.

The PPF provides a valuable safeguard for members of occupational pension schemes and around 39,000 scheme members will remain in the current scheme when it starts its formal PPF assessment period at the end of March unless they take a transfer.  Their benefits will be aligned to PPF compensation levels.

Work is now under way to allocate the members and scheme assets between the new BSPS and the old scheme. Central to this work is the requirement to ensure that, from 29 March 2018, pensioner members receive their appropriate pension payment depending on which arrangement they will be moving into. 

Further information will be provided to all members ahead of the split taking place on 28 March 2018.

It is the mark of a good Chair to always be right in public, but to be furious in private! If I were Allan Johnston, I would be just that.

By a strange coincidence, I met my investment hero, Hugh Smart for the first time last night. For all his suave charm, he made it clear that the last two years have been the toughest of his working life. Hugh was in 2016 (when SSgA stopped doing the numbers)  the undefeated CIO of the world, his investment record impeccable.

That Britain, a proud industrial nation with a booming motor industry, came so close to abandoning its capacity to produce steel is remarkable, that Britain’s #1 pension scheme in terms of its cost controls and investment track record, should have come so close to entering the PPF even more so.

If you want to understand the implications of the deal done by the Trustees, here is an excellent Q&A that was published last night in the Teeside Gazette. It is also worth looking at the wonderful gallery of images from the Teeside works over the years

Allan Johnston’s achievement, was made possible by Hugh Smart’s asset management, but it is fundamentally the Chair who has carried the weight of the past two years. Well done to the Trustees of BSPS for keeping afloat in the stormiest of waters.


But there are lessons to be learned

The problem that a strong chair has, is that there’s no one in the Court to criticise him. Even if the Emperor had had no clothes, he’d have been admired. I’m seeing Allan next week, a meeting I’m looking forward to for a number of reasons, not least because I am not in his Court and will be able to read to him this comment on the “Trustee’s best effort” (received in response to the announcement above)

Sending out 16/30 page packs of difficult to read documents and reminder letters to everyone even if you had already voted.

Not providing a panel of regulated advice to tell you the best option because they were so frightened of losing their impartiality.

Wording an option “I want to move with the current scheme…”

Not allowing email submissions or opting on-line.

The failings of Time to Choose were visited upon the members, but the same member who wrote this criticism could also post on the BSPS Facebook page

Applications do take time to process and most remain in the statutory payment period of 6 months after the original CETV guarantee date (eg september for dec 11 extended to jan 26 submission). It is very frustrating and we hope the message Rich got will at least take away some of the panic.The pensions office are not trying to prevent you getting your transfer but no one has handled this size of RAA before and in parallel with the transfers they are getting all the data ready for the PPF/BSPS2 split which is another mammoth task.

I am not apologising for the Trustees but just trying to put some truth to what is happening.


Institutional winners and individual losers

Just as the transfer of 83,000 members is a triumph, so the loss of 39,000 members to the PPF will include some minor financial tragedies.  I have been told that the trustees got well over 100,000 responses but there were lots of duplicates and changes of mind so the final figures  in this statement are on the conservative side.

Just under 97,000 members completed and returned option forms, of which 86% were from members choosing to switch to the New BSPS and 14% were from members choosing to move into the Pension Protection Fund.

But 25,000 people never returned a form. And counted among those who elected to join BSPS there are those who have made elections to transfer and are awaiting their money.

Citywire report today that many of these transfer requests may not be met from BSPS. How much of this is hearsay and how much fact is open to question. What isn’t open to question is the worry that the waiting is causing.

Here are two postings on the Facebook pages which demonstrate the stress that Time to Choose has put these steelworkers through

A lot of us only chose bsps2 so we could utilise the extra time needed to meet the artificial deadline forced on us, given the farcical response, and response times, of the cetv requests…..

and poignantly

Another day hoping and praying that Mr Postman will drop a letter through my door and it will say that ‘Mr …. , your pension has been transferred’ Alas no 😦 Its only been 145 days or 20.7143 weeks since my FA sent my forms off

This is not to mention those steel workers who find themselves – having transferred- in arrangements manifestly unsuited to their circumstances


In the final analysis , this is a war that should never have been fought

The battle to wrest a scheme back from the PPF was a battle that should never have been fought. The Trustees have won that battle at such cost that they may have lost the war.

This is why – were I Allan Johnston, I would be openly proud and privately furious. It was never the intention of those who set up BSPS and ran it so well for many decades, to have members posting comments like this.

As it is now over three months since they were authorized to send them can someone please tell me where I stand in regards to claiming as they have cost me possibly tens of thousands. Am shaking with rage as I type this.😠😠😠😠😠😠😠

and finally this

Well thats it, waiting game is over.
Transfer not accepted.

These are bodies lying on the battlefield. We can sit and read this , but we have no idea of the pain that these comments attempt to express , and for what?

We cannot continue to fight these kind of wars and leave the people we are trying to help in such a state.

I am sure I will read many analysis’ of the BSPS numbers , but my thoughts are with those members who have had their working and social lives disrupted as they have been.

Let’s hope that it can be done  better – the next time a scheme goes into an RAA.

BSPS hartlepool

The way it was

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in BSPS, pensions and tagged , , , , , , , . Bookmark the permalink.

One Response to BSPS – a big win – but at what cost?

  1. Alan says:

    Pensions funds are food for the predators of tomorrow.
    Today’s youngsters should ponder on that thought.

    Liked by 2 people

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