Scene 1: Pre-97 Pensioner trips and falls in front of suited and booted William Bill
255 on Westminster Bridge
Bill 255: Oh dear! Let me help you up.
Pensioner: Thank you. I have been waiting for your help for 28 years.
Bill 255: Really! How’s that then?
Pensioner: I have not had much of a pension lift in that time. 3 miniscule increases
since I retired in 2002. I have been trying to get the attention of all of
the governments of the day, but I can’t seem to get my message
across. Word on the street had it that new Minister Bill – I mean Bell –
said you were coming to help me. So, I have been standing here
hoping I would meet you.
Bill 255: Well, here I am now. So how can I help?
Pensioner: I have read all about you Bill 255 from cover to cover. I have even
studied your notes. And all the media coverage too. However, as far as
I can tell, there‘s very little you can do to help me. You have 12 policy
areas but only 1 is relevant to my problem. And your wording does not
even mention the Pre-97 problem.
Scene 2
Bill 255: I think you may be right there. I seem to have a lot of fluffy words and
jargon about “surplus extraction”, “mandation”, “better placed Trustees”
etc. but nothing very specific and relevant to improving benefits for
members.
Pensioner: But the messages from the Minister Bill – I mean Bell – said changes
were coming in pension reforms. It’s all so terribly confusing and
disappointing to a person of my age.
Bill 255: What about those new powers for Trustees to pay surplus to the company.
Pensioner: Our Pension Scheme Trustee has had those powers since 2010.
Hasn’t made any difference to me. And did you know that the power is
for payment of surplus to the Company but not the members? Imagine
that. I joined Digital in 1968 and worked 28 years. I retired in 1996
when I turned 60. My 10K pension has only moved to 12 K in 29 years.
I have lost around 55K in pension value. And just last week the
company bought another company for $14B cash.
Bill 255: Really? I was told that new survey information revealed only 17% of
Defined Benefits (DB) pensioners are like you and had not received
any discretionary increases.
Pensioner: Yes, I am one of the unlucky 17%. I know that there are more than 33K
of us. I have also read that there may be 1.8 million. But the Pension
Regulator also called TPR doesn’t seem to know.
Bill 255: I heard that I am to be followed by secondary legislation and guidance. Maybe they will help.
Pensioner: And how long will that take? Don’t you see how old I am now? Couldn’t you, Bill 255, be amended to fix this injustice?
Bill 255: Maybe – Would you tell me what can be changed about me so that I can help?
Pensioner: Of course, but you will have to figure out all the details with the rest of the alphabet, DWP, TPR and the Minister Bill – I mean Bell.
Scene 3
Pensioner:
- First, The Pension Regulator needs to chill and relax a little and
encourage Trustees to invest to create surplus. Not to go crazy – just to
take a bit more risk but stay safe to ensure pension promises can be
met. - Then Trustees of the Pension Scheme need the power to pay surplus
to members as well as the company with safeguards. - There absolutely needs to be a requirement for a fairness test before
approving surplus payment. Or else it could turn out to be Robert
Maxwell 2.0 - And there needs to be a requirement building on Pensions Act 2021 to
develop a funding and investment strategy for all pension benefits
including discretionary increases over the longer term. - This may also be a chance to restore the loss to the “unlucky 17%” and
government should specifically encourage and even reward that. - Stalemates between employer and trustee should absolutely be
avoided. I know for a fact that these have existed for several years in
some cases. - Of course, there are situations that need special attention. For
example, where pension funds do not have a group of Trustees and
have a single Trustee. - Ensuring true representation may also be an issue for some schemes
where the employer selects the Trustee without any election by
members. - And if the changes go through, they will need to be watched to ensure
the planned change delivers what was intended. TPR must collect the
data annually about any scheme that does not award an increase. - Injustice cannot go under the radar as it has to date. I often wonder
who has been minding the shop since 1997.
Bill 255: That all sounds possible. If there’s a political will, that certainly sounds
like a way forward, I had better head off now to the Bill Committee. I
hope that when I emerge with amendments, I will be helpful to you and
all the Pre 97 pensioners. From the look of you, you have clearly
waited long enough.
You can read the Pensions Schemes Bill 255
