A pension is for life – not just for Christmas, but it would be well to think of the corporate misers who fail to share their windfall pension surpluses with staff as Scrooges.
Patrick Hosking in the Times writes on behalf of Amex Pensioners, he also mentions Pfizer, Hewlett Packard, Chevron, 3M and Goldman Sachs, all of whom have stopped paying discretionary increases on pre 1997 pensions.
Discretionary increases were also “missing” at BSPS and will continue to be missing for steelworkers now they have had their benefits bought out. Buy-out crystallises surpluses and rarely in the favor of the pensioner. Running-on is usually in the member’s interests.
None of the schemes mentioned above are bought out.
And unlike the sponsors of BSPS, these American companies are not in financial trouble. They are well funded.
Hosking reports
In January Amex reported record net profits of $8.4 billion, up by 11 per cent. The number of its cardholders grew by 12.2 million to 140 million worldwide.
It’s not exclusively American sponsors who are putting the foot on the pensioner’s throat.
the accountants KPMG UK and Lloyd’s Register, the shipping data and certification company, have also been accused of deserting their former employees in a similar manner.
Before 1997, there was no requirement for schemes to increase pensions but most pension schemes factored in cost of living increases into pensions to ensure that the real value of pensions didn’t fall. Amex pensioners reckon that the real-money value of their pensions has fallen by 30% in the 10 years over which Amex has frozen pension payments.
Add to these pre-1997 complaints, the concerns of those in schemes such as BP and Shell and my own at Zurich, that schemes in surplus are choosing not to honour discretionary promises to pay full inflation linkage when it can be afforded and you get a view of the mounting pressure from pensioners.
In the interests of equitability, it should be pointed out that almost all these company sponsors also run DC schemes, at considerably lower cost to the sponsor. These too are candidates for funding from DB surpluses, especially where the DB schemes are “hybrid” (with the DC scheme sits in the same trust as the DB plan).
It is good that senior journalists such as Patrick Hosking are picking up on these issues and I’m sorry that we are hearing so little about this from the Pensions Regulator. Hosking reminds us
Last month MPs on the work and pensions select committee recommended that The Pensions Regulator undertake research to ascertain the extent of the problem after receiving many complaints. The inflation of the past two years has made it more acute.
We cannot let the corporate scrooges win the day, the pensioner’s voice should be heard, thankfully we live in a parliamentary democracy with a free press. This is not the case all over the world, Britain should be leading the way on stakeholder issues such as this.