This scheme appears to be newsworthy because it is being put to bed despite it being very small indeed
The Geoghegan & Company Staff Pension Scheme has completed a £1.5m full scheme buy-in with Just Group, securing the benefits of all eight deferred members and eight pensioner members.
The deal, which was completed using Broadstone’s SM&RT Insure process in tandem with Just’s streamlined bulk quotation service Beacon, was highlighted as evidence that there is capacity in the market for even the smallest schemes
Nice advertising for Just and Broadstone and nice for a firm that is now part of MHA a part of Baker Tilly. The Chair of Trustees is Euan Fernie a partner of MHA and he is keen to get some advertising for MHA into the story
“The company can progress to its next chapter with MHA, free from the costs and risks of the legacy arrangement and, along with the trustees, safe in the knowledge that the member’s benefits have been secured.”
But I wonder what we are celebrating.about. 16 people have benefits secured by Just whereas previously they had been in a with-profits policy
Having been fully invested in a with-profits fund, the scheme’s assets grew while the buyout cost fell in recent years as interest rates rose.
Just how much specialist service do you need to work out how much you owe your pensioners and how much is the cash in value of your with-profits policy? The 16 people were 100% secure from Baker Tilly/MHA’s covenant and a market that incredibly increased the value of the with profits plan.
I have no idea why the pension world needs to know how pleased Euan Fernie is to be saying goodbye to a proportion of his benefits to an insurer. I expect the rest will go soon enough and there will be more headlines but are we really involved in what is happening?
This is a story that celebrates there being insurers and consultants who can profit from a scheme of no meaningful size which forms part of an insurance portfolio of with profit funds.
We are not here talking about improving the retirements of 16 people, infact if this with profit policy grows faster than is needed, it will make someone a profit – unlikely to be the members who are now being paid by an annuity.
Only accountants could really find this interesting. worthy of celebration and a cause of mutual self-congratulation.
Surely we can set the bar higher, surely there are better things that can be done for schemes that have achieved with-profit stability and the promise of with-profit pensions.
Geoghegans, now MHA, are one of the better pension scheme auditors in my view. Also, there’s something amusing about people trying to pronounce it. Finally, it’s demonstrating that there are insurers out there who will insure these ultra wee schemes.
I’m grateful to you both, Henry and Nick, for sending me down yet another rabbit hole with reminders of a once well-known Edinburgh firm of CAs, Geoghegans.
(Nick won’t be surprised that I do know how to pronounce the firm name.)
I first worked in a CA office across in Glasgow in 1970, when the partners all wore bowler hats (no doubt a progression from earlier top hats) and their names were displayed on the brass plate at the front door.
Curiosity about Geoghegans and Euan Fernie led me to Companies House, which to me sadly seems to have become a cesspit of opaque filing and a haven for some fraudsters.
What I found among the Edinburgh registered offices doesn’t merit Dan Neidle’s attention, as it’s small beer, but nevertheless it’s more than puzzling
to this now retired CA.
“Geoghegans Chartered Accountants” brought up instead a company called Bayham Production Limited.
“Geoghegans” brought up instead in one place a company called In The Winning Zone Limited and in another Dramley Production Limited.
“Geoghegans Accountancy Limited” was as you’d expect, except of course these days the filed accounts are “Unaudited”.
Quis custodiet ipsos custodes?!
I passed over “Geoghegans Outsourcing Limited” and “Geoghegans Trustees Limited”. The latter, like many corporate trustees who do act when it suits them, filed “dormant company” accounts.
Another dormant company was “St Colme No. 1 Limited” formerly Geoghegans Limited. The Edinburgh offices are at number 6 St Colme Street, not number 1.
Another three “Geoghegans” had once been Geoghegan & Co. and like some of the earlier ones revealed new company names unrelated to Geoghegans who seem
to have taken over dormant listings of one sort or another.
By the time I got to “Danzig Limited” previously Geoghegans Accountancy Limited, I’d had enough for one morning.
As for Euan Fernie, he appears under both an Edinburgh address and a Milton Keynes one.
The Milton Keynes one includes MacIntyre Hudson (the MH in MHA) and at least their accounts are audited, by Hillier Hopkins.
MacIntyre Hudson LLP trades as MHA and is an independent UK member of Baker Tilly International.
Geoghegans as a firm
started in 1918 and with the pensions buy-out and so many changes of name I suppose it’s the end of an era.
I think the buy-in or buy-out of small DB pension schemes can mainly be justified by the avoidance of the disproportionately large administration costs per member in small schemes.
However surely the appropriate direction for an outcome orientated legislative and regulatory environment is to seek to minimise administrative costs for all members, whether they are in a DB scheme, where effectively they are borne by the employer, or in DC arrangements where they are borne by the Member and are inherently higher because of the need to invest on an individual basis and maintain separate accounts,
I was shocked to discover that the future administrative cost provision costed into solvency and s179 valuations in a medium sized DB scheme was well in excess of £10,000 per member (and was more when discount rates were lower).
It appears to me that legislators and regulators should be the first to address this and question the value of the administrative burden they put on pension schemes, often as an early target to try address societal goals. I particularly have in mind requirements such as Implementation Statements, which have no relevance to the individual member who has no opportunity to opt out even if he is aware of it and even more unlikely read it, nor do they change investment behaviour where decisions are taken at a much more strategic level. I would also question bureaucratic guidance and codes that are turned into profitable training and advisory assignment by “professional” advisors. The approach being suggested to collect Inheritance Tax on unused pension pots and other death benefits is another case in point.