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“A colossal financial scandal” – Reeves welcomes Brookfield to our pensions.

henry tapper

I cannot say I am  impressed by the Linked in  post from Rachel Reeves, I do not see the Bermuda based arm of Brookfield as a good owner of Britain’s pensions.

I side with the comments of Jnamdoc, the mysterious commentator on this blog.

Response to Just Group privatised from over the water to provide “workplace pensions”

jnamdoc says:
July 31, 2025 at 7.32

The loss of players from the UK stock exchange is sad but is a secondary matter. There is a colossal financial scandal playing out under plain sight.

The £2.4bn for Just, and the £5.6bn for PIC are clear demonstrations of the super profit in the Pension Insurance sector – these are super smart financiers and they’ll want their payback, plus some!

But remember that the reward or payback to the foreign shareholders for every penny of that £8bn of purchase price can only come from one source – from the excess from massively overfunded legacy UK DB schemes. Think about that for a moment..,

If there was any moral justice then that £8bn, or at least a lion’s share of it, could and should be used to provide better inflation protection to the DB pensions of the many thousands of mostly low paid UK pensioners, and / or to augment NOW those DB pensions. Aside from the moral case, addressing the cost of living crisis for pensioners, the multiplier effect from any current augmentation would provide a very significant fiscal boost.

It’s now more widely understood that for each £1bn of DB pensions that gets gobbled up by the Insurers, the excess funding and expected (very low risk) embedded profit is circa £200m. That’s at least a 20% uplift that could and should be used to increase the pensions for many UK pensioners!

The previous opacity and financial wizardry around the insurer regime and its careful drip feeding of profit visibility over many years has been blown out of the water by these multi-£billion acquisitions – the Insurance sector is cashing in their £bn chips right now.

We have the tools and the knowledge about what is happening right under our noses, and really could do with a Regulatory regime (and a Minister) that finds its teeth to put member outcomes FIRST.

It’s really not that complicated – for each successive £1bn of fully funded DB scheme, should Policy be supporting that the surplus and expected excesses of +£200m goes to ‘the market’, or, the pensioners?

It’s bizarre we’re even having this debate.

The bigger play explored by the Financial Times

Like Jnamdoc, the FT is not so sure that the move on British pensions is in the best interests of pensioners.

Lex comments;-

While private capital providers and insurers do have some synergies, tie-ups are not devoid of risk. For one, private credit is a new and growing sector, and its resilience in a downturn has not been tested. What’s more, insurers will tend to invest policyholders’ money in assets originated by their parent.

There are ways to manage the risk this creates — think special committees, endless assessments and the use of consultants to validate the price at which assets are transferred. But the biggest safeguard is a sharp-eyed regulator. Now that this investment trend has landed in London, the Bank of England will be training its sights on the sector to make sure deals that are beneficial for the acquirers are good for their new customers too.

In their acquisition document published by the London Stock Exchange (where Just is currently quoted) is a further reason for a “sharp eyed regulator” to act as a “safeguard”.

The Acquisition positions Just to maintain its offering in individual annuities while enhancing its ability to capitalise on evolving retirement trends, including the growing opportunities in defined contribution pensions, with £1.3 trillion in UK defined contribution assets projected across 14.9 million active savers by 2044.

The Combined UK Group, with the support of BWS’s balance sheet and expertise in individual annuities and wealth solutions, will be able to reinvest capital strategically in these key growth areas.

It is not just DB pensions that Just (BWS owned) will be after, it will be DC pensions which Brookfield hopes will be locked down and eaten up by its predatory insurer – now owned by smart financiers from the other side of the pond.

 

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