How were we to know…?

A few thoughts on tPR this week and it’s decision to reject the Recovery Plan put forward by Uniq and the scheme Trustees. The proposal in and of itself was not really that remarkable. But clearly tPR saw something in it that they didn’t like – probably the 3 year contibution holiday – and told them to go back to the drawing board. Uniq are now saying that they will have to raise more capital in order to pay off the £400m plus deficit. Not easy when you’re only making £4m pa profit. The difficulty in all this is that since the pension scheme is the firms’ largest creditor, any equity/debt swap deal, (which is almost the only thing left on the table) will mean the trustees potentially commiting a criminal offence in that this will breach the rules on self investment. The law limits trustees to no more that a 5% stake in the Principal Employer’s business. The prosecutor for those offences would be …yup, you guessed it…tPR!!

Now I don’t know for certain that tPR would have been aware of this little conundrum when they rejected the original deal. But if they weren’t then frankly they should have been or at least they should have reasonably forseen the possibility. Discussions between the company, the Trustees and tPR would have been pretty detailed and wide ranging. Were they blinkered by their statutory duty to protect the PPF and completely took their eye off the ball when it came to self investment? Perhaps but if so, they’ll never admit it and we’re never likely to know. Where’s Wikileaks when you really need it??

In other pension news, the Parliamentary Ombudsman has weighed in with her views on the latest development in the Equitable Life saga. It seems that the Chadwick Report has fallen somewhat short in the level of compensation that is being paid to policyholders who were affected by the Guaranteed Annuity Rate saga of the early ‘Noughties’. Despite £4.8 bn being lost, only £500m is being put up. Ann Abrahams had issued her own report in 2008 blaming significant regulatory failures in the debacle but now says that the Chadwick report is flawed due to it’s terms of reference being ‘irrelevant’. Well, I don’t know about that but I sincerely hope that this will now be brought to a swift conclusion. The Bloody Sunday enquiry took over 30 years…if this goes the same way, then most of the potential claimants will indeed be beyond caring.

And finally, it seems that Astra Zeneca is following the BBC Pension Scheme in trying to limit the amount of salary increases which will count towards Final Pensionable Salary. Entirely predictably, the Unions are threatening strike action. Word to the wise here folks – be grateful that you still have a Final Salary pension of any sort. Going on strike will hardly improve the financial position of your employer who might well be struggling to keep the businees (and your jobs) going in the light of statutory funding requirements. Just remember the potential alternative (Clue: birds lay eggs in them!!)