Andy Smith makes an important point. He is a top actuary from Barnet Waddingham and a spokesperson for a generation of wronged pensioners he does not belong to, but who holds professional responsibility for being a proper actuary.
Well there is plenty to be happy about and the PPF and FAS are showing the way for schemes that owe billions in unpaid increases to the pre-97 brigade who haven’t got the right at least to some inflation linked pay (we hope backdated).
But let’s not get away from the problem of rogue companies like Hewlett Packard whose pension schemes are not in PPF but who don’t pay increases to their pre-97 pensioners
Jane Foley made Andy Smith’s point with a little more passion d, being herself a victim of a rogue fund, her spokesperson at the WPC Patricia Kennedy .
Let us wish this amendment of the Pension Schemes Bill success.as it passes into legislation.
In my opinion these rogue companies and their schemes have to explain why it is that they are not use the companies resources (if the scheme is not funded to surplus) or the scheme’s surplus if it is to pay those who have outstanding increases (at the least to the minimal).
They are not required to , but their is a decency to pensions that they should conform to and that has been set by the Government’s requirement that the PPF sets the way.
There are many campaigning , some from the Brighton beach protest. I pay tribute to Terry Monk as a leader but to all who have spoken out over the last 28 years. They speak for those who have died without recompense
I was at a conference of Pension People yesterday, watching Rachel Reeves make this announcement, I clapped. The Chair called for points of note and not a person mentioned this. I mentioned this. Like Andy Smith, I feel responsibility for the harm done to the Pre-97 pensioners impacted.
There is another group of pensioners who should be considered and at the outset I do need to declare a personal interest as I do fall into this category.
My former employer went into administration in 2010 seeing no reasonable prospect of paying the estimated deficit recovery contributions and the risk based PPF levy being demanded of it for its 2002 closed fully index linked DB pension scheme (98+% of the benefits accrued prior to 1997). The pension scheme was refused entry to the PPF, determined as being 108% funded (gilt yield c. 4.3%) for PPF level benefits. In 2016 after sorting out GMP equalisation, pensions and deferred benefits were bought out (at the further inflated BPA price – gilt yield c. 2%) on a ppf benefit plus an extremely small (<0.3%) plus basis. This suggest there must have been a significant scheme experience gain between 2010 and 2016.
I am therefore left with an essentially non escalating annuity.
While I am personally protected by other pension arrangements, I do consider my former colleagues reliant on pensions provided by the Scheme have no less a justification for Minimum Rate pension increases as those whose less well funded DB schemes entered the PPF or became eligible for the FAS.
But should bear the cost of restitution:
Should it be the insurer who priced its policies not against a reasonable projection of its likely future investment returns but reflecting the spot measure of the gilt yield at the point of entry?
or
The PPF who refused entry to a scheme that was sufficiently well funded (on its historic spot gilt measure) to pay non-escalating benefits but was unable to pay the pre 1997 benefits promised by the Scheme?
Peter. This looks like a really complex problem best left to a solicitor for action or advice from a financial professional or your MP. I am not a professional but am a member of the PAG who view that anyone who had pre-1997 company service and GMP should attract suitable inflation indexing where their scheme quotes RPI. You have my sympathy in this matter – good luck, Never Surrender!
The Society of Pension Professionals has just published its thoughts on this:
the-spp.co.uk/wp-content/uploads/SPP-Paper-Pre-1997-Indexation-18.11.25.pdf