A small article in that must read magazine for all lovers of …er….furniture – Cabinet Maker – (and with thanks to ‘My Company Pension’ for pointing it out) really sums up the current parlous state of Defined Benefit pension provision in the UK today.
HJ Berry a Preston based furniture manufacturer, has gone into administration with the £9 million black hole in it’s pension fund being a major contributory factor in its insolvency. It’s 85 staff members are likely to find themselves without a job soon and while of course, there is the possbililty that their pensions will be protected to a large extent by the Pension Protection Fund, (assuming the scheme is eligible) nevertheless, the situation is symptomatic of the state not only of the pension universe but also of manufacturing industry in the UK in 2010.
As we hear about the billions owed by BT to it’s pension arrangements, the figures are so large as to be almost become meaningless to the likes of you and I. But here is a small company, brought to its knees by bad regulation, bad law and bad economics. As £56 million gets put into the paws of a couple from Gloucester (good luck to them by the way), a fraction of which would have saved those 85 jobs, doesn’t it just, for a teeny tiny minute, make you think that somewhere, priorities need reassessing?
Postscript: and just to prove it isn’t just manufacturing, apparently a ‘Magic Circle’ law firm based in Canary Wharf has also just disclosed its DB scheme deficit has increased by 50% from £11m to nearly £16.5 m. And before the ‘let’s kill all the lawyers’ believers start feeling warm and cosy with their schadenfreude, remember that this scheme is not for the fat cat partners, but mainly for the secretaries, support staff, and junior lawyers
Jennie advises large multi-employer schemes as well as smaller single employer arrangements and has wide experience of both Defined Contribution and Defined Benefit schemes. Jennie qualified in 1986 originally as a criminal prosecutor. She sits as a Magistrate in her local justice area and is an Approved Chairman and Deputy Chair of the Bench Training and Development Committee. Jennie was formerly Legal Director of the Occupational Pensions Regulatory Authority. When her busy practice allows, Jennie likes to indulge her passion for travelling. To consult Jennie on any corporate Pensions matter, please call her on +44 (0)20 7749 2700 or send her an email by clicking below:
[...] why have we seen two such failures in a week? Both HJ Berry, a Preston based cabinet maker, and the Readers Digest suffered insolvency, ostensibly due to an [...]