Not convinced by Frank Field’s report at all

The Seriously Terrible Report Into BHS, Sir Philip Green And The Pensions Collapse

The point being that the report notes that low and falling interest rates play merry havoc with pension valuations and deficits.

Yet absolutely nothing at all is done to explain how interest rates falling from 5% to 0.5% has affected that pensions deficit at BHS.

Personally, without knowing how to do the calculations, I’m entirely happy with the idea that Green bears some blame. But so too does the general xhange in macroeconomic conditions. And I do think that the report should at least tried to show us which was which.

It doesn’t which I think is a huge gap in it.

Almost, you know, brash Jewboy in the schmutter trade being badly treated by the establishment sorta sized gap in it.

10 thoughts on “Not convinced by Frank Field’s report at all”

  1. Well, yes. Economic policy rescued the profligate at the expense of the thrifty. But shhhhhhhh……………

  2. It’s not quite a direct comparison, but the transfer value of my old company pension increased by 250℅ between about 2007 and 2013, just to keep the notional future pension payment constant.

  3. @John Davis – I has a similar experience, an increase of c35% in about 4 years from 2011 to 2015.

    Shows just how vulnerable defined benefit schemes are.

    One thing I’m wondering is if those wailing for deficits in pension schemes to be met by company owners would be happy to allow company owners to take out surpluses, if they arose.

  4. Lots of companies, not just BHS, didn’t pay in (or pay significant amounts) to their pension schemes when the times were good, being assured by the actuaries that the schemes were in surplus.

    Now, when (for pension schemes at least) the times are bad, and the times are bad for some companies, the actuaries insist that the schemes are in deficit and large payments are needed. And some companies are making these and some companies are not or cannot.

    Never mind the 1997 disaster (which would not have fully worked through the BHS scheme while Green was running BHS, note – not running the pension fund) as well as the accounting guidance changes (and therefore fund valuation changes) in 2007 and 2015.

  5. I understand that there is actually legislation that prevents companies from overpaying into their pension schemes (or they have to pay tax on the extra). The problem being that what they consider to be fully funded is technically enough to pay all of the benefits, but not enough to pay for the administration of setting up the payments or managing the scheme going forward, so even if the company behind a fully funded scheme goes bust, the pensioners will likely not receive quite as much as promised.

  6. Just to clarify, is Tina Green not actually British? According to this interview in the Sunday Times, she was born in England.

    It’s a moot point since she lives in Monaco (and unlike the Yanks we don’t tax our citizens everywhere they go), but it’s important to not give your critics any ammunition.

  7. As far as I’m aware she’s South African by citizenship. And she’s definitely not domiciled here (no, not a non-dom, not of British domicile at all).

  8. I’ve never understood why a spiv should be exempted from being called a spiv just because he plays the race card.

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