Robert Maxwell - 25 Years Ago

westv

5th November 1991 he jumped ship and left his pension fund members with a huge headache.
I believe they ended up getting only 50% of their benefits - after the Government and a couple of investment banks stepped in.
Could it ever happen again?

dunstonh

The Maxwell case was the trigger for bringing in loads of rule changes and consumer protections that did not exist before. The PPF did not exist at the time of Maxwell. Had it existed, as it does today, the pension holders would have got most of the pension.

So, no the outcome cannot happen again. Nor can the company use pension assets as Maxwell did. However, failing defined benefit schemes are common.

Turbinedave

DunstonH , not nitpicking here but the PPF has not been tested with a major pension failure and "cannot happen" is a bit optimistic Aka BHS ????

hyubh

Turbinedave wrote: »

DunstonH , not nitpicking here but the PPF has not been tested with a major pension failure and "cannot happen" is a bit optimistic Aka BHS ????

Not sure how BHS is particularly evidence against the optimistic view - it's been in the PPF assessment period for most of the year, and no one is seriously expecting it to come out. As the PPF is hardly in crisis about the fact, the system's broadly working as envisaged for that particular example.

Turbinedave

Nothing to worry about then

ffacoffipawb

Good old Captain Bob bob bob ....

bowlhead99

Turbinedave wrote: »

DunstonH , not nitpicking here but the PPF has not been tested with a major pension failure and "cannot happen" is a bit optimistic Aka BHS ????

"Cannot happen" meaning the consequences seen with Maxwell pensioners losing a monstrous amount of their pension - prompting the industry change - shouldn't happen.

Of course a company funding a major pension can fail, or a pension can enter protection with substantial excess actuarial liabilities - nobody is suggesting that cannot happen. The PPF exists to bail out pension failures both major and minor. Certainly if Philip Green doesn't bother to put two or three hundred million of his own money into the BHS scheme, its pensioners aren't going to lose half their pensions. Because of there being a PPF.

You don't need to 'test' the PPF by actually doing a high profile collapse, to do the maths on what it would cost.

Turbinedave

Like any other insurance , it's great until you need it

bigfreddiel

Lessons were learnt, everything is fine now, it can never happen again folks so don't worry

Cheers fj

dunstonh

The PPF is levy based system based on what is needed. Much the same as the FSCS. So, if more money is needed, more money will be collected. Currently, the PPF is in surplus.

bowlhead99

Turbinedave wrote: »

Like any other insurance , it's great until you need it

Yes, like any insurance policy that has deep pockets and the ability to pull money from sponsoring companies valued at hundreds of billions to help it meet its obligations over time, it's good that you have it when you need it.