Who’s protecting pensions from the impact of COVID?


Fairs ,Cumbo, Morley and Altmann

This is a very real and important question as the priorities of Government tend to be protect jobs and the businesses that create job over the incomes of those who have left the labor market. The key performance indicators of Government are the economy (stupid) and the measure of a healthy economy is Gross Domestic Product. The problem with pensioners is that they don’t produce much, so the tendency of Government departments other than the Department of Work and Pensions is to de-prioritize pensions.

So there have to be people in Government standing up for pensions and for pensioners and I’m pleased to say there are. Step forward Ros Altmann, who is reported in the Financial Times today.

“We hope to persuade the government to ensure that any assets pledged to a pension scheme cannot be sold during a moratorium without approval of the PPF and also ensure that financial operators cannot game the PPF by moving themselves into ‘super-priority’ status, leaving other unsecured creditors such as pension schemes with far less resources on insolvency,”

The Baroness was speaking after an important change of direction (aka climbdown) from the Department of Business Energy and Skills over the Corporate Insolvency and Governance Bill.

To quote Josephine Cumbo on the matter

Emergency proposals laid before parliament last month would have reduced the influence of both TPR and the Pension Protection Fund, the lifeboat scheme, in recovering debt owed to a company retirement plan by a sponsoring employer.

But   the FT were able to report

On Friday, the government said it had “listened” to concerns and would extend the bill so that both the PPF and TPR would be able to play a “key role” in ensuring that the interests of pension schemes were “fully taken into account” in any restructuring or rescue plan.

There has been an effective rearguard action by the pension industry and  everyone from Ros Altmann and Jo Cumbo (providing the publicity) to the PPF and tPR hammering within the machine  , to trade bodies such as the PLSA and the Society of Pension Professionals should be congratulated.

Of course Ros Altmann is more than a publicist, there is an effective group in the House of Lords who know about defined benefit pensions and understand what battle to fight in standing up for pensioners. The “Upper” House is of course the senior house in terms of years, and the maturity of most peers means that they have skin in the game.

It is also worth noting that most of the peers who speak up for pensioners are female and that they are cross party.

This latest intervention from the pensions lobby will be followed through on Tuesday 23rd June  when Ros Altmann and the peers will be able to table further amendements.

For those with a legal bent, the Bill – amended by Committee last week can be read here.

An effective pensions lobby.

It is easy to dismiss the House of Lords but it is no longer a gentleman’s club, it is (amongst many things) providing a very real service to pensions and pensioners both present and future.

And while I have dismissed in the past the Pensions Regulator and the pension trade bodies , in this matter I think we should be grateful for their effective lobbying. The PPF under its excellent CEO Oliver Morley, is also worthy of praise.

According to the Pensions Regulator , 10% of the 5500 DB schemes in the UK are not getting contributions meaning their sponsors are breaching their covenants with their trustees. This is highly worrying for deferred pensioners who have the very real possibility of having reduced pensions paid to them by the Pension Protection Fund.

But the financial difficulties of employers does not mean the pension scheme need to be abandoned to the PPF. So long as there contingent assets and other protections in place, pension schemes and the PPF can protect themselves from other creditors jumping ahead of them in the queue, selling these protections for the benefit of shareholders and those holding company debt.

We wish Altmann and company success next week and look forward to further positive reports from the always reliable Jo Cumbo.


About henry tapper

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