> Plumbing Pensions scheme, one of the few schemes in the UK to be multi-employer, meaning it could be accessed by different, unconnected, employers and their employees... because it was a "last man standing scheme", those still in it had to pick up the liabilities of those who had already left - even though they had no connection with those businesses.
> The Pensions Act 1995 introduced a series of reforms including a "minimum funding requirement" for pension funds. It also introduced something called "Section 75 pension debt", which meant if an employer "departed" a scheme, they could still be pursued for any shortfall... Since 2005 far more stringent rules have been in force - and, by this new yardstick, Plumbing Pensions was deemed to be under-funded.
So pension systems were set up with an element of shared liability. That's a bit of a risk for employers, but also insurance for pensioners if their individual small employers failed. The worst case was that the scheme as a whole collapsed if many members dropped out.
Then the government applied a minimum funding requirement to payment structures which had been running for years without planning for that value. Then, it converted shared risk from an insurance model to a legal obligation, which could apply to individuals if their businesses were small enough. Then, it raised the minimum on plans which had been running for 40+ years, and couldn't possibly be backfilled.
It's hard to overstate just how badly Menzies was treated by these regulations. His pension enrollment was not only moral but financially responsible - it only became a problem when the terms he'd agreed to were repeatedly, retroactively altered. Nor should he be blamed for being slow to react to the changes - the last-man-standing scheme meant someone was getting stuck with that bill. Large, incorporated companies, by contrast, could be bankrupted but would at least face no personal debts.
Meanwhile, what about the Mirror Group, which motivated of these changes? Well, Robert Maxwell died before seeing any liability for his theft. His sons and other company directors were acquitted of all charges. And the government bailed out 50% of the uncovered pensions.
It's one small case of the usual dynamic, I suppose: some large businesses and multimillionaires behaved badly, so they faced no significant consequences , but a bunch of unrelated people who'd behaved just fine had their lives upended by a clumsy response.
> The Pensions Act 1995 introduced a series of reforms including a "minimum funding requirement" for pension funds. It also introduced something called "Section 75 pension debt", which meant if an employer "departed" a scheme, they could still be pursued for any shortfall... Since 2005 far more stringent rules have been in force - and, by this new yardstick, Plumbing Pensions was deemed to be under-funded.
So pension systems were set up with an element of shared liability. That's a bit of a risk for employers, but also insurance for pensioners if their individual small employers failed. The worst case was that the scheme as a whole collapsed if many members dropped out.
Then the government applied a minimum funding requirement to payment structures which had been running for years without planning for that value. Then, it converted shared risk from an insurance model to a legal obligation, which could apply to individuals if their businesses were small enough. Then, it raised the minimum on plans which had been running for 40+ years, and couldn't possibly be backfilled.
It's hard to overstate just how badly Menzies was treated by these regulations. His pension enrollment was not only moral but financially responsible - it only became a problem when the terms he'd agreed to were repeatedly, retroactively altered. Nor should he be blamed for being slow to react to the changes - the last-man-standing scheme meant someone was getting stuck with that bill. Large, incorporated companies, by contrast, could be bankrupted but would at least face no personal debts.
Meanwhile, what about the Mirror Group, which motivated of these changes? Well, Robert Maxwell died before seeing any liability for his theft. His sons and other company directors were acquitted of all charges. And the government bailed out 50% of the uncovered pensions.
It's one small case of the usual dynamic, I suppose: some large businesses and multimillionaires behaved badly, so they faced no significant consequences , but a bunch of unrelated people who'd behaved just fine had their lives upended by a clumsy response.