Company Gone Bust and my Pension as Well

Touchstone_2

I have very recently learned, via the media, that the company I worked for until I was forced to retire 20 years ago(Hewden Stuart) ,has gone bust. According to the media the failure of the company is down to Brexit.
I retired at age 59, normal retirement for me would have been 65. I have not received any official communication about this collapse but via my monthly pension advice slip I contacted the company who make the pension payments. They confirmed that the company had gone and that my pension would be paid in November and December but stated they were unable to give any more information. The promised payments have been received, but no matter how many times I contact them they have nothing to say about future pension payments. They did say that the Trustees were exploring the possibility of applying to the PPF but could not confirm this would happen.
I have been on the PPF website but whilst there is a lot of information there, there is nothing that adds any clarity regarding my own position or the company (Hewden Stuart) pension fund.
Does anyone have any experience of this situation and if there is any informal or binding time table of events/procedures that Pension Trustees and the PPF must follow. In other words how can I find out what is happening and when it will happen? :mad::(

hugheskevi

Details of what happens next are available at this page - http://www.pensionprotectionfund.org.uk/AssessmentPeriod/Pages/AssessmentPeriod.aspx. Your scheme should be at stage 2.

I was forced to retire 20 years ago...I retired at age 59, normal retirement for me would have been 65.

That means you are well above normal retirement age now, so receive better protection from the PPF than members below normal pension age.

They confirmed that the company had gone and that my pension would be paid in November and December but stated they were unable to give any more information.

You should continue to receive the same pension amount, but if the schemes enters a PPF assessment period there will not be any annual increases (from the dates you mention, I assume all or nearly all of your pension accrual was accrued before 1997).

Does anyone have any experience of this situation and if there is any informal or binding time table of events/procedures that Pension Trustees and the PPF must follow.

Every case is different, and a lot depends on how clean the scheme's pension data is and whether there is any prospect that the scheme has enough assets to secure pension benefits in excess of PPF levels. Note the PPF statement that:

We aim to complete assessment for most schemes within two years.

Ganga

Touchstone wrote: »

I have very recently learned, via the media, that the company I worked for until I was forced to retire 20 years ago(Hewden Stuart) ,has gone bust. According to the media the failure of the company is down to Brexit.
I retired at age 59, normal retirement for me would have been 65. I have not received any official communication about this collapse but via my monthly pension advice slip I contacted the company who make the pension payments. They confirmed that the company had gone and that my pension would be paid in November and December but stated they were unable to give any more information. The promised payments have been received, but no matter how many times I contact them they have nothing to say about future pension payments. They did say that the Trustees were exploring the possibility of applying to the PPF but could not confirm this would happen.
I have been on the PPF website but whilst there is a lot of information there, there is nothing that adds any clarity regarding my own position or the company (Hewden Stuart) pension fund.
Does anyone have any experience of this situation and if there is any informal or binding time table of events/procedures that Pension Trustees and the PPF must follow. In other words how can I find out what is happening and when it will happen? :mad::(

I believe Hewdens were in trouble long before Brexit.

bigfreddiel

I thought pension schemes were protected, but there again didn't Kodak go belly up a few years ago, not to mention the BHS scheme, and many years ago the Mirror Group.

Evetytime things like this happen they say lessons have been learnt now, it can't happen again so you should be fine. Don't stress over something thst may never happen.

Cheers fj

Marine_life

You can have a look at your entitlement here:

http://www.pensionprotectionfund.org.uk/Pages/Compensation.aspx

In general the limitations you will have are (i) if your pension exceeds the cap; (ii) Because you retired early your entitlement may be reduced.

This may take a while to be resolved so you may just need to keep asking.

Marine_life

bigfreddiel wrote: »

Every time things like this happen they say lessons have been learnt now, it can't happen again

Who is the "they" in this?

Clearly lessons have been learned as most final salary schemes have been closed, however the fact is that there are still lots of underfunded final salary pension schemes out there. While most should have a plan to resolve their deficit, it still means that the pension scheme is vulnerable to the economic viability of business responsible for the funding (as is the case here).

The issue in this case has clearly not been helped by the business being highly levered (as is the case with many private equity investments).

Thrugelmir

Touchstone wrote: »

According to the media the failure of the company is down to Brexit.

The Company reported sizable trading losses in it's 2012, 2013 and 2014 financial years. One assumes 2015 was similar. Blaming Brexit appears to be little more than yet more lazy journalism.

System

Marine_life wrote: »

Who is the "they" in this?

Clearly lessons have been learned as most final salary schemes have been closed, however.

However, the big lesson that no one seems to want to learn is that pension funds should be managed and invested entirely separately from the company. It's an obvious eggs in one basket situation allowing the two to be intertwined.

Surely pensions should be invested in a spread of industries and other assets to minimise the risk from any one collapse?

Shimrod

Clifford_Pope wrote: »

However, the big lesson that no one seems to want to learn is that pension funds should be managed and invested entirely separately from the company. It's an obvious eggs in one basket situation allowing the two to be intertwined.

Surely pensions should be invested in a spread of industries and other assets to minimise the risk from any one collapse?

Defined Benefit pensions are separate from (although funded by) the sponsoring company. They are run by pension trustees (or a trustee company) that must act in the best interest of the members. They are also not able to hold more than 5% of assets that have a direct link to the sponsoring company (e.g. shares in the company, or ownership of a building leased to the company).

If you look at a DB scheme, you will typically find a mix of bond and equity investments. Some larger funds (> £500m) may also have some less mainstream investments.

Marine_life

Clifford_Pope wrote: »

However, the big lesson that no one seems to want to learn is that pension funds should be managed and invested entirely separately from the company.

They are managed separately.

The issue is that pension funds have no control over government policy (interest rates etc.) and life expectancy changes. All of which contribute to deficits.

The issue then is that deficit funding needs to come from the company (where else?) so you cannot entirely separate their economic fortunes.

System

Marine_life wrote: »

The issue then is that deficit funding needs to come from the company (where else?)

Then surely it was rather foolish to enter into commitments that cannot be funded?
It just takes the risk full circle back to the company again.