BHS 'could file for administration' threatening 11,000 jobs on Monday

Generali

I wonder how that advice squares with the fiduciary duty of the Trustee.

vivatifosi

Trustees should be acting on paid advice Gen. You don't make decisions like that single handedly, especially not in such a huge fund or with such a big deficit. As a trustee, you want to stay on the right side of the Pensions Regulator. As it is, the length of the repayment plan will have piqued the interest of the Regulator, as it is a trigger mechanism, as shown here:

http://www.thepensionsregulator.gov.uk/docs/statement-to-employers-feb-2009.pdf
(our triggers, page 2)

So that board will know that it was already under a spotlight.

However ultimately if the company and the trustees disagree, it is very hard. I know that some trustee boards have very difficult relationships with their scheme sponsors. The trustees could of course call in the Pensions Regulator themselves, and may well have done so, but this is something that won't necessarily ever be made public.

Per the accounts posted earlier, KPMG was acting as the scheme's Covenant/Financial advisor.

Generali

vivatifosi wrote: »

Trustees should be acting on paid advice Gen. You don't make decisions like that single handedly, especially not in such a huge fund or with such a big deficit. As a trustee, you want to stay on the right side of the Pensions Regulator. As it is, the length of the repayment plan will have piqued the interest of the Regulator, as it is a trigger mechanism, as shown here:

http://www.thepensionsregulator.gov.uk/docs/statement-to-employers-feb-2009.pdf
(our triggers, page 2)

So that board will know that it was already under a spotlight.

However ultimately if the company and the trustees disagree, it is very hard. I know that some trustee boards have very difficult relationships with their scheme sponsors. The trustees could of course call in the Pensions Regulator themselves, and may well have done so, but this is something that won't necessarily ever be made public.

Per the accounts posted earlier, KPMG was acting as the scheme's Covenant/Financial advisor.

Hmm. It must be hard being a Trustee when dealing with a rapacious sponsoring company.

The rules do need to be looked at again as what has happened here is at best a tragedy of the commons: Mr & Mrs Green have been siphoning off money that should have been going into the pension fund and relying on the insurance fund paid by all employees (ultimately) to foot the bill.

As an aside it's interesting to note that BHS and the BHS pension scheme both have PWC as auditors.

CLAPTON

Generali wrote: »

Hmm. It must be hard being a Trustee when dealing with a rapacious sponsoring company.

The rules do need to be looked at again as what has happened here is at best a tragedy of the commons: Mr & Mrs Green have been siphoning off money that should have been going into the pension fund and relying on the insurance fund paid by all employees (ultimately) to foot the bill.

As an aside it's interesting to note that BHS and the BHS pension scheme both have PWC as auditors.

one just has to blame the EU

Generali

CLAPTON wrote: »

one just has to blame the EU

I blame all those cheap Polish auditors myself.:money:

CLAPTON

Generali wrote: »

I blame all those cheap Polish auditors myself.:money:

personally I',m not a racist

vivatifosi

Generali wrote: »

Hmm. It must be hard being a Trustee when dealing with a rapacious sponsoring company.

The rules do need to be looked at again as what has happened here is at best a tragedy of the commons: Mr & Mrs Green have been siphoning off money that should have been going into the pension fund and relying on the insurance fund paid by all employees (ultimately) to foot the bill.

As an aside it's interesting to note that BHS and the BHS pension scheme both have PWC as auditors.

There are many things I find strange in this case. The problem is, I don't know enough about the rules to have an opinion as to whether they are in the right. They tweak my antenna as being quite interesting though.

For example, each scheme is supposed to have at least one third member nominated trustees. When I look at the accounts for the pension fund, three companies are listed as trustees. Within those companies, only in one are the trustees split out in the accounts. That has two company appointed trustees and two member nominated. So is that ok, or a bit shady?

In terms of the advisors acting for both sides part, this certainly happened in my own scheme, but as of about ten years ago that all changed. So my scheme no longer has the same advisors at any level. IIRC at the time, PWC decided not to act for trustees due to potential conflict/Chinese walls, but maybe auditors were not a part of this.

The pensions landscape has changed massively over the past years and legislation is certainly much tighter than it was. If the Green family are not pursued, it will be down to slick advice and staying the right side of legal changes.

It does stick in the gullet though. You don't as a trustee do everything you can prudently and at some times at great pain to the sponsoring company "doing the right thing", only to find that all the money you've paid into the PPF is about to be diminished in order that someone can take delivery of a super yacht.

vivatifosi

It's also worth contrasting with Tata Steel. In spite of operating in a very difficult market, their deficit reduced from £2bn to £485m and had a ten year repayment plan in place for the shortfall. Quite different, no?

http://www.telegraph.co.uk/business/2016/03/31/tata-steels-pensions-add-to-hurdles-for-a-rescue-bid/

stator

vivatifosi wrote: »

It's also worth contrasting with Tata Steel. In spite of operating in a very difficult market, their deficit reduced from £2bn to £485m and had a ten year repayment plan in place for the shortfall. Quite different, no?

http://www.telegraph.co.uk/business/2016/03/31/tata-steels-pensions-add-to-hurdles-for-a-rescue-bid/

Not that hard when you have been given billions of pounds of free pollution permits which you can sell on the open market.

antrobus

vivatifosi wrote: »

It's also worth contrasting with Tata Steel. In spite of operating in a very difficult market, their deficit reduced from £2bn to £485m and had a ten year repayment plan in place for the shortfall. Quite different, no?.../

BSPS is a much bigger beast, £14bn in assets.