Emotive clap trap aimed at the elderly
Embargoed to coincide with Pension Schemes Bill?
I am surprised that Pension Security Alliance has decided to have a second go. This nonsense was embargoed till 10pm on Thursday 4th June but what is there to embargo? There is nothing in this press release but marketing for PIC and Just and insurers looking to lock down pensions into annuities.
Have Just and PIC and their friends a need to protect people from the failure of a currently sound pension scheme? I thought the Government set up the PPF for cases where the sponsor failed and I hope that people who join and joined pension schemes paying defined benefits are aware that there is a chance that the scheme will end up in the Pension Protection Fund.
It is up to the Government’s legislation and the Pension Regulator to ensure that pension schemes are invested for growth and managed for security. It would seem that two insurers offering not pensions but bulk annuities , backed by one consultant and two charities representing “older people” have decided to speak for the nation through press releases. The first press release got general acceptance in parts of the press (The Times, Express and a number of trade papers), I hope that they feel ashamed of themselves. I hope no further instances of unbalanced use of this clap-trap, occur.
I have been forwarded the second press release with a single strong word of disgust as comment . I hope that this is the view of the main body of the press and readership. To have Government business lobbied in this way is bad behaviour, to have these press releases quoted without any balance is a disgrace.
That this practice continues shows just how arrogant some parts of the insurance industry are in thinking they are the guardians of pension security. I hope that I will not be the only person publishing his or her outrage at the press release which I publish in full below (Other than the names of contacts acting for “PSA”).
Embargoed media release for use after 2200 on 4 June 2025
Please see below (and attached) an announcement from the Pension Security Alliance (‘PSA’) relating to the Pension Schemes Bill (due to be published soon). The bill includes government plans to allow employers to “extract” cash from defined benefit pension schemes, which poses a threat to the retirement incomes of millions of people who have never been consulted or informed.
The proposals to allow “surplus” money to be “extracted” from pension schemes raise the risk of schemes running out of money and leaving people with less than their full pensions. The PSA thinks these plans are risky and argues for pension scheme members to have a say in the debate.
The Pension Security Alliance is made up of:
- Silver Voices, the only independent, individual membership organisation for senior citizens in the UK.
- The Older People’s Advocacy Alliance (OPAAL), a charity promoting the rights and needs of older people.
- John Ralfe, a widely-respected pensions consultant and chair of two pension schemes.
- Pension Insurance Corporation, a specialist insurer of DB pensions
- Just Group, a specialist UK retirement business.
“Defined Benefit pension raid plans are risky– pension scheme members must get a say”
Government plans to allow employers to “extract” cash from defined benefit pension schemes pose a threat to the retirement incomes of millions of people who have never been consulted or informed, a campaign group has said.
The Pension Schemes Bill – due to be published soon – will set out plans to change the law to allow companies to take money out of the pension schemes they set up to pay pensions to their retired workers. More than 10 million people benefit from such defined benefit – or “final salary” – schemes.
The Pension Security Alliance – a group of businesses, campaigners and pensions professionals – says that the proposals to allow “surplus” money to be “extracted” from pension schemes raise the risk of schemes running out money and leaving people with less than their full pensions.
The PSA is highlighting a Department for Work and Pensions consultation document from 2024 which says: “Any extraction of surplus will reduce security for members.”
The Alliance said that ministers are pushing ahead with the controversial plans without taking account of pension scheme members and their wishes – a consultation on the policy earlier this year took evidence from only 5 individual pension scheme members.
The PSA said: “Millions of people depend on these pension schemes for their retirement income. This is money that those people earned when they were working. Pension schemes exist to pay pensions – they’re not a piggybank for ministers or businesses to dip into.
“The millions of people who depend on pension schemes for their retirement income have been excluded from this conversation. It can’t be right for ministers to push ahead with a policy that could affect the pensions of millions of people after hearing from only five individual pension scheme members.
“It is vital that ministers stop to listen to the views of the millions of people who depend on defined benefit pensions– they should be asked how they feel about new laws that would allow employers to dip into their pension schemes and extract cash and use it however they wish. Some of those millions are elderly, some are vulnerable – it’s not right to put their pensions at risk without asking them what they think.”
Allowing money to be removed from pension schemes before members’ benefits have been secured runs the risk of those schemes running short of money in future if financial conditions change, the Alliance said. In that case, some schemes could collapse and be bailed out by the Pension Protection Fund, which sometimes pays reduced pensions to members.
The PSA said: “The Government’s own proposal document admits that extracting cash from pension schemes increases the risk that schemes won’t be able to pay pensions in full. Instead of pushing ahead with these risky plans, we urge ministers to think again and listen to the millions of people who depend on pension schemes for a secure income.”
The Pension Security Alliance is made up of:
- Silver Voices, the only independent, individual membership organisation for senior citizens in the UK.
- The Older People’s Advocacy Alliance (OPAAL), a charity promoting the rights and needs of older people.
- John Ralfe, a widely-respected pensions consultant and chair of two pension schemes.
- Pension Insurance Corporation, a specialist insurer of DB pensions
- Just Group, a specialist UK retirement business.
Notes to editors:
There are 8.8 million members of private-sector DB pension schemes in the UK. Many members name family members as beneficiaries who can inherit pension incomes. On that basis, more than 10 million people have a direct interest in the DB schemes affected by the Government proposals.
The original proposals for surplus extraction were made by the DWP in 2024. The consultation document published at that time says: “Any extraction of surplus will reduce security for members.
The official government consultation on the surplus plans received evidence from only five individual scheme members:
Polling by PIC has previously shown that members of DB pension schemes overwhelmingly oppose changes that could reduce the security of their pensions. The polling also shows that 44% of people with DB pensions potentially meet the Financial Conduct Authority’s definition of “vulnerability” – because of challenges including bereavement, illness or financial insecurity. https://www.pensioncorporation.com/news-insights/press-releases/2025/pension-scheme-members–afraid–of-government-plan-to–extract–
Other campaigners including the National Pension Convention have warned that changing rules preventing employers from removing cash from pension schemes risks a repeat of the Robert Maxwell scandal: https://www.npcuk.org/post/pension-campaigners-call-for-halt-on-plans-to-raid-db-schemes
You’re not alone, Henry.
But as claptrap or clap-trap is a term I’m less familiar with, I checked its origins.
The word “claptrap” emerged in theatre in the 18th century, stage devices or gags used to provoke audience applause.
So, while it wouldn’t have been around in Shakespeare’s time, an example could be in the Scottish play, the speech delivered by the character M (and I don’t mean Malcolm) when he
contemplates the murder of King Duncan and uses flowery language and dramatic pronouncements, such as “I had rather be a tyrant than a man,” which, while evocative, are also somewhat overblown and lacking in genuine depth.
Turning to the PSA (not to be confused with the PLSA), its participants, Silver Voices and OPAAL UK, were new to me.
Annual memberships cost £8 and £12 respectively, but I think I’d rather spend a little more on my senior railcard.
Silver Voices is said to have 5,000 members, while OPAAL UK obtained some National Lottery funding of £10,000 or so.
There are 22m pensioners in the UK.
When I was a DB trustee I really enjoyed the occasional letter from individual members asking, for example, why we didn’t invest in gold. I always replied to such letters, explaining why we did what did, or why we didn’t in the case of gold (its lack of an income with which to pay future pensions).
But I was also mindful that these were individuals, with individual opinions, while as trustees we were responsible for the whole membership (another expression “tail wagging the dog” comes to mind).
I am also reminded of a recent exchange between Robin Rowles and Byron McKeeby on another of your blogs, Henry.
Mr Rowles’s opinion was “the only point in the life of a Pension Scheme when we can be sure it is in surplus is the point at which the last member of said scheme dies”.
This desire to “be sure”
and its equivalent obsession with belt-and-braces “security” of pensions is holding us back.
Yes, estimates of surpluses (and deficits) at any point in time are ephemeral. But employers, who stump up
most of the cash/capital
for pensions, shouldn’t have to wait till the very end.
Interim decisions can be taken, based on cash flow forecasts (rather than balance sheets) and after taking professional advice, to allow employers at times to “extract cash” and redeploy that prepaid capital in maintaining and growing their businesses.
That’s what trustees are for, to take prudent decisions above any noise coming from very small groups or individuals.
Debate is good. At least now it’s out of the shadows. So much of this influencing and shaping of Policy happened, damagingly, behind the scenes, and not properly challenged. Better it’s in the open, and let them explain why their vested interest should trump over the greater national interest and the drive for growth?
Insurers / insurers have an economic and hence societal role, but it’s not growth, and I’m sure our Policy makers, hopefully informed by these discussions / debates now understand that. This current Minister is not of or beholden to the City, thankfully.