| PS4FF | X | m | (No name, age unknown, chairman, no further information given) unspecified |
| PS4FG | X | m | (Ken, age unknown, no further information given) unspecified |
| PS4FH | X | m | (Malcolm, age unknown, no further information given) unspecified |
| PS4FJ | X | m | (John, age unknown, no further information given) unspecified |
| PS4FK | X | f | (Gay, age unknown, no further information given) unspecified |
| PS4FL | X | m | (Ron, age unknown, no further information given) unspecified |
| PS4FM | X | m | (Jim, age unknown, no further information given) unspecified |
| PS4FN | X | m | (Michael, age unknown, no further information given) unspecified |
| PS4FP | X | f | (Jane, age unknown, no further information given) unspecified |
| JNPPSUNK (respondent W0000) | X | u | (Unknown speaker, age unknown) other |
| JNPPSUGP (respondent W000M) | X | u | (Group of unknown speakers, age unknown) other |
| Ken (PS4FG) |
[1] That er it should be any account for a pension fund should carry the name of pension fund and ... any transactions involved with pension fund money wh it should be a duty of the Financial Institution to make sure that any account they were paying money into was a pension fund account. |
| Unknown speaker (JNPPSUNK) |
[2] If I may say so the key point isn't it that ... a lot of the transactions you discussed were off market transactions, they were unusual transactions and the Financial Institutions that were carrying out those transactions whether they were acting as banker or acting a as broker, they would have had knowledge that those transactions were not normal market transactions. [3] So if the law was clear ... that in those circumstances they should have been on notice and should have therefore watched where the money was going, there wouldn't have been a problem and are we not saying that legitimate stock lending which I think is what is about is suggesting, if carried on properly on the market, would be all right, but if it immediately goes off market into the back doors and back rooms and people can't see what's going on and the Financial Institutions take part in that, then they are doing something that un undoubtedly is probably going to cause loss to pension funds and shouldn't there be a clear law which makes them liable in those circumstances. |
| Unknown speaker (JNPPSUNK) |
[4] No you were saying [...] weren't you? |
| Ken (PS4FG) |
[5] Oh I'd say it is |
| (PS4FF) |
[6] Yes. |
| Ken (PS4FG) |
[7] wrong anyway in that er I'll say it's the er early on it in the report Good defines what he determines a prus trustees duty and as I said to a sort of effectively orb enter into a tr transaction which immediately cost effecting kind of money rather than making money for the pension fund er is against that duty in the first place, but it to it should however be ma made explicit that it is against that duty which I will say stock lending may be okay for a pension fund, but not stock lending where the er pension fund is acting as the borrower rather than the lender. |
| (PS4FF) |
[8] Right, Ken any other points? |
| Ken (PS4FG) |
[9] Er can I er I I started to comment on about the er er bank accounts and which are y you know er my the reaction that I saw was [...] all round the table er I think we would go further but er ... any company handling pension funds should carry pensions somewhere in their names on all on all their paperwork etcetera so that everybody's totally clear that they are dealing with pension funds and er er to agree with a comment that you made in one of your earlier reports that er designation of bonus of shares of pension funds should be clearly er marked on those shares er that also would have a at least alerted these financial institutions as once again that they were handling stocks belonging to pension funds and they still ignored it in that that w case that they did, but er they would have not had the excuse that er apparently some of them have made that er they were not aware that these were pension fund assets. |
| (PS4FF) |
[10] I think they are still claiming well it's not that I didn't know, but anyway [laughing] Ken [] |
| Ken (PS4FG) |
[11] Er we did we were gonna raise a point on that the clash of the regulatory rules and the producery duty of under trust law, you know and I ... I think there you know there there was a comment that that I picked up with Professor Gower you know in his report which I think where he said the Government obviously have greater confidence than I in reliance on pristine trust law in relation to modern commercial developments such as unit trusts and occupational pension schemes, which its founding fathers never contemplated. [12] Now there was nothing in Good really that I think addressed this mismatch between those two types of law. [13] Now I think that the Good did say oh well there is a law commission report expected, but I think that you know the Good should address somewhere tha that problem of trust law and regulation should and then I did in fact on going through the report and er you know and also your own reports erm there's the one about designation of assets you know, which I think was a very good recommendation of yours, I think the actual area of responsibilities and the wider role of actuaries was important. [14] I think the inde independent corroboration for actuaries was another important factor, custody confirmation by the auditors, veto of transfer of assets, independent auditors for pension funds, independent custodian arrangements, in-house investment management, you made some comments, co-ordination of the various regulators, co-ordination of the professional advisers, establishment of the Pension Tribunal, you know now as far as I was concerned on on my sort of looking through it, those were all recommendations that that you have made over your two years and I couldn't really find any response to those in Good, and I think that's er you know we ... we personally found that disappointing. |
| (PS4FF) |
[15] Also I mean er we take your point and we've made it before Ken that there's a real danger of asking for a report from someone like Professor Gower and then [...] picking it, instead of actually taking the whole thing because it does actually add together in some sort of coherence erm and had Professor Gower's report been an exception in this entirety, we may not have been had the pleasure of having you back again today, but thank you very much, er all three of you for coming [...] points so clearly |
| Unknown speaker (JNPPSUNK) |
[16] Thanks very much |
| (PS4FF) |
[17] [...] at the end was very good wasn't it? |
| Unknown speaker (JNPPSUNK) |
[18] Mm. |
| (PS4FF) |
[19] [...] that's good. |
| Unknown speaker (JNPPSUNK) |
[20] Mm. |
| (PS4FF) |
[21] Very good. |
| Unknown speaker (JNPPSUNK) | [...] |
| (PS4FF) |
[22] Yes. |
| Unknown speaker (JNPPSUNK) | [5 minute break] |
| (PS4FF) |
[23] All right, we want to make a start if we can, if people could settle down. [24] What I'm gonna ask you to do, if you could introduce each of yourselves and say which pension fund you er come from er and if we start from your left, my right. |
| Malcolm (PS4FH) |
[25] Oh ... the thing in front of me it's Malcolm Adams and I'm with the National Association of British Steel Pensions. |
| John (PS4FJ) |
[26] It's John Mostin also with the National Association of British Steel Pensions. |
| Gay (PS4FK) |
[27] I'm Gay Appleby, General Secretary for the National Federation of Post Office and B T Pensions. |
| Ron (PS4FL) |
[28] I'm Ron Smart, Chairman of the British erm Federation of Post Office and B T Pensions. |
| Jim (PS4FM) |
[29] Jim Castle, Member of the Imperial Tobacco Pension Fund. |
| Michael (PS4FN) |
[30] I'm Michael Smedley, Chairman of the Impact which is the Imperial Tobacco Pension Fund. |
| (PS4FF) |
[31] Gay. |
| Gay (PS4FK) |
[32] Thank you Chairman erm I would like I know that you've been listening to the first er part of our session this afternoon, erm and I'd like to ask you to discuss with us one of the questions that we asked the [...] group the [...] Pension Fund erm and that's to discuss the balance of power that exists between the employer and the various groups and classes of pensioner. [33] Perhaps if I just start with that simple question and see how it develops. |
| (PS4FF) |
[34] What [...] help us,we we'll go to we'll direct the questions to different people erm and if you agree, just say you agree so that we don't have er ... erm ... a session of people just rec reciting what everybody else has said, but if we start with you erm Jim, sorry I can't see the |
| Michael (PS4FN) |
[35] Michael Smedley. |
| (PS4FF) |
[36] Yes, right. |
| Michael (PS4FN) |
[37] Erm, we feel very strongly about this that there should be a balance of power with the employer nominating no more than half of the trustees. [38] After all he's put the money in to pay pensions and the beneficiaries ought to have a strong hand in saying how that money is used, so we see half the trustees coming from the employer, the other half from the members of the pension fund, and we've got a pension fund with the very heavy weighting of er pensioners and not so many employees and we would like to see the remaining seats er half the trustees elected, partly from the current employees, partly from the deferred pensioners and partly from the pensioners and reflecting in a broad way the numbers in each of those categories. |
| (PS4FF) |
[39] Erm |
| Michael (PS4FN) |
[40] We think that would be a fair way of of erm managing the fund and avoiding the case of having tame ... tame trustees who do what they employer tells them. |
| (PS4FF) |
[41] B T, same or different? |
| Gay (PS4FK) |
[42] Erm well slightly different in the fact that er we er have two close schemes with far more er beneficiaries than there are er subscribing members, and at the moment that are four nominated by the er employer and four by the unions er we wish to say a pensioner erm that the rights were a pensioner nominee to that board of trustees, because we feel that er the situation is er is going to increase, we've got so many beneficiaries and that the pensioners have no representative er I know that erm people on the boards of trustees are completely impartial, but on the other hand there is no pensioner there, the members are unsure of the fund, because of what's been said, not that I'm implying it's not a secure fund, it is a secure fund, but they think why are they keeping the pensioners off, they there is some sort of hidden agenda they will not have us on there because neither of the businesses although we have tried for several years er they will not entertain at the moment erm a pensioner trustee, and yet Professor Good in his report acknowledges the merit of pensioner nominated trustees, er particularly in the sort of schemes where we've got,wh where th the majority of beneficiaries. |
| (PS4FF) |
[43] Great, British Steel? |
| Malcolm (PS4FH) |
[44] Yes er I think we're just slightly different again er Chairman inasmuch that the British Steel Pension Scheme at the moment has fifty ce fifty per cent employer er trustees and fifty per cent nominated trade union trustees. [45] We too would like to see some pensioner and [...] pensioner trustees on that trustee board, but we do also recognise because it is er a large scheme heavily weighted er with er pensioners and deferred pensioners in the very fact that it has been transferred from the public centre of public er sector into the private sector, that we would like to see an independent trustee er er appointed on to the er Committee of Management it would er er sort of act as a balance and be able to provide er specialist advice to particularly the Trade Union Trustees and for that matter the Employer Trustees so as to keep a broad balance of what's happening within the [...] that time. |
| (PS4FF) |
[46] Very good er we may come back to that in a moment. |
| Malcolm (PS4FH) |
[47] Thank you. |
| (PS4FF) |
[48] But listening to you make that case it's very similar to reading the great debate on franchise reform in this House in the last century, when people said we should be included and that people like us should be able to have the vote and put people into Parliament, it's I mean it was just that you were you were making that plea about pro that the Board should be representative as being like ... the group who are benefiting. [49] You've made very powerfully erm and I'm that's a point that we'll take on board. [50] When you talk about this split, fifty-fifty, could we go back that way. [51] Who elects the Chairman? |
| Malcolm (PS4FH) |
[52] Well [giggle] that's er ... that's another thing that's happened within the British Steel's er scheme, the Chairman seems to be elected in himself or by the company, it's certainly not e elected by the Trustee Board and er ... a and we would like to see [...] |
| (PS4FF) |
[53] You mean parachuted in is he? |
| Malcolm (PS4FH) |
[54] Yes, he's certainly parachuted in. |
| (PS4FF) |
[55] [giggle] all right. [56] But who but, but that's describing what happens, how do you think the Chairman should be elected? |
| Malcolm (PS4FH) |
[57] I think |
| (PS4FF) |
[58] Even letting you you've all talked about the you know employers are paying money in and so on, we don't want the schemes wound up, er ... if I was the the employer, might I not be concerned if you elected a ... a chairman that wasn't ... erm favourable to me? |
| Malcolm (PS4FH) |
[59] Er you might er the company might well be concerned about that point, but er I think if the composition of the Board was er correct, that er that possibly wouldn't arise. |
| (PS4FF) |
[60] What you mean you'd have blocking mechanisms? |
| Malcolm (PS4FH) |
[61] Yes. |
| (PS4FF) |
[62] Yes, very good, I see the point. [63] Thanks. |
| Unknown speaker (JNPPSUNK) |
[64] I see no reason additionally why the independent people on the Board should not act to protect the company in the same way as they're trying to help protect the other members [...] . |
| (PS4FF) |
[65] Yes, but your colleague has also made the point that the constitution might have a blocking mechanism so that people, both sides, could be satisfied, wasn't it. |
| Ron (PS4FL) |
[66] But Post Office and B T management appoint the Chairman of the Trustees, there are four Trustees appointed by the |
| (PS4FF) |
[67] Yes. |
| Ron (PS4FL) |
[68] Management, four by the Trade Unions and the Chairman is appointed by the management. |
| (PS4FF) |
[69] Right. |
| Unknown speaker (JNPPSUNK) | [...] |
| Unknown speaker (JNPPSUNK) | [...] |
| Ron (PS4FL) |
[70] No, no, the present ... the present one was a ... I think he was a Chairman of a big building society before he came into the Post Office and they use these ... are on three year terms, but er the previous Post Office one er spent nine years as Chairman, spent three yea three terms of three years. |
| (PS4FF) |
[71] So they're there for three years? |
| Ron (PS4FL) |
[72] Yes. |
| (PS4FF) |
[73] Right and er is it a full-time job the Chairmanship? |
| Gay (PS4FK) |
[74] Erm I don't know, I don't think it's erm I mean I I think it occupies er [laughing] seventy-five percent [] of his time, but it isn't full-time. |
| (PS4FF) |
[75] No, I was just thinking,we we're, we're debating the in the Commons at the moment, changing the parole board from having part-time members, to having ... salaried full-time ones, which are on limited contracts ... and that clearly puts those parole board members in a different position to the Home Secretary and one it's ju you just do it because it's a part-time activity, you may get some expenses that you think is important, and I just wanted to get clear whether the Chairman on a limited contract a large part of their work appointed by the employer. [76] Thanks. |
| Unknown speaker (JNPPSUNK) |
[77] Our Chairman is appointed by the company and is usually a senior management member. |
| (PS4FF) |
[78] Right. |
| Unknown speaker (JNPPSUNK) |
[79] The erm pensioners and the employees have no say whatsoever in that. |
| (PS4FF) |
[80] Very good. |
| Ron (PS4FL) |
[81] That's ... that's the present case, but I think er impact would say that with a fifty-fifty split, then those trustees should elect their own chairman and should be free to bring in independent trustees, so if you had a board of say four company members and four elected by the members er of the pension fund, they might decide to have two outside independents, one of which they would choose as the Chairman. |
| (PS4FF) |
[82] So you no longer have a fifty-fifty split then, do you? |
| Ron (PS4FL) |
[83] Er ... you ... er you'd have two outside independents and you couldn't say how they would be, but they would be elected by the whole te whole er Board of Trustees. |
| (PS4FF) |
[84] Jane? |
| Jane (PS4FP) |
[85] Er I'm forgive me if this information is already available to the Committee but er are each of your schemes are they money purchase schemes or final salary schemes? |
| Ron (PS4FL) |
[86] Ours is a finance salary scheme. |
| Jane (PS4FP) |
[87] [...] committee did draw distinction between the two different kinds of schemes, erm perhaps if I could just ask you what do you think of the committee the Good reports er conclusion on training for trustees where they er the recommendation was that it was a laudable objective, but should not be made compulsory? |
| Ron (PS4FL) |
[88] Er can I answer that. [89] We er are fortunate enough in having a training scheme, in fact we were able to elect our first pensioner representative trustee two years ago and he is with us today, we've just had another election and er two this time were elected, they will be trained, they had er Mr Hill had a two-day training by our actuaries er Watsons which are a big company, er but in talking to him about it he felt there was a lot to be said for having continued training, not just at the beginning of a two or three-year stint, but successively later. [90] It's a big responsibility which is very much on the trustees shoulders, he is, he is standing on his own there and it's |
| (PS4FF) |
[91] We were we were only smiling then because Watsons also trains us [giggle] |
| Unknown speaker (JNPPSUNK) | [laugh] |
| (PS4FF) |
[92] It's one of our advisors. |
| Ron (PS4FL) |
[93] No, but we feel that's very important indeed. |
| (PS4FF) |
[94] Absolutely, no. [95] No, no we understand the value of that don't we. |
| Gay (PS4FK) |
[96] Erm well we would like to see training of the trustees, there is no training at the moment er for the trustees in erm either of our schemes er and we very much in our submission came out [...] we felt there should be er training from the trustees. |
| (PS4FF) |
[97] Right. |
| Unknown speaker (JNPPSUNK) |
[98] Yes, we would like to er certainly see er training become compulsory with trustees and we would also like to see er guidelines set er for that particular training, so that train so that the trustees within all schemes would receive similar training, rather than piece-meal by one set of actuaries or another set of actuaries. |
| Unknown speaker (JNPPSUNK) |
[99] Erm can I just clarify this point, the impression I'm getting from the, from the phraseology in the way you've chosen your words is that your trustees in your particular pension funds which all er former nationalised industries, er haven't received any training. [100] Is that correct that er |
| Gay (PS4FK) |
[101] That is correct. |
| Unknown speaker (JNPPSUNK) |
[102] Well the as far as we know the er certainly the trade union |
| Gay (PS4FK) |
[103] Don't get any. |
| Unknown speaker (JNPPSUNK) |
[104] Don't get any. [105] When the management trustees get any training, we don't know. |
| Unknown speaker (JNPPSUNK) |
[106] Yes, in British Steel they, they do receive training, they do receive training. |
| (PS4FF) |
[107] Right. |
| Malcolm (PS4FH) |
[108] Even if but I'm not saying that it's er the proper type of training that we would like to s |
| Unknown speaker (JNPPSUNK) | [...] |
| (PS4FF) |
[109] You were saying that in fact you still don't get any training. |
| Malcolm (PS4FH) |
[110] That's correct. |
| (PS4FF) |
[111] Yes, so you're privatised? |
| Malcolm (PS4FH) |
[112] That's correct. |
| (PS4FF) |
[113] Yeah. [114] Just to make a party point, is that all right? |
| Unknown speaker (JNPPSUNK) | [laugh] |
| Unknown speaker (JNPPSUNK) |
[115] Even accepting the fact that training is desirable I think that the trust law is so complex |
| (PS4FF) |
[116] I know. |
| Unknown speaker (JNPPSUNK) |
[117] That it's very, very difficult indeed to be trained to know all the parts of it. [118] In the last analysis is the innate honesty of a trustee who realises that perhaps something is going right and takes [...] advice. |
| (PS4FF) |
[119] Could we just quickly, who should pay for the training of the trustees, employer or the trust? |
| Unknown speaker (JNPPSUNK) |
[120] The trust. |
| (PS4FF) |
[121] The trust? |
| Unknown speaker (JNPPSUNK) |
[122] The trust, yes. |
| Unknown speaker (JNPPSUNK) |
[123] Pen pension fund. |
| (PS4FF) |
[124] Very very good. [125] David? |
| Unknown speaker (JNPPSUNK) |
[126] Of course the role of the trustees is, is, is ... re- affirmed really by Good who er says that there under the under trust or as he sees it, the trustees should remain the legal owners of the fund and I wonder if we can move on to ownership. [127] I I think you were all here listening to the erm [...] pensioners before you were they were talking about their ideas which were also our ideas in our er report on the designated ownership of, of the pension funds and in particular they had a couple of ideas which you may have heard about having the word pension in the in the names, just technical points, er pension in the names of er of the funds and and people who were er giving advice on behalf of them. [128] I wonder if you could like anybody would like to elaborate on that? [129] We'll start at the far end. |
| (PS4FF) |
[130] Can I, can I just pass for a minute and think on this one and come back. |
| Unknown speaker (JNPPSUNK) |
[131] Mm |
| Unknown speaker (JNPPSUNK) |
[132] I will pass as well temporarily. |
| Gay (PS4FK) |
[133] Erm |
| Unknown speaker (JNPPSUNK) |
[134] It's really sorry, it's really the, the question of whether the the the ... the pension fund belongs to the trustees or is it [...] has been found [...] |
| Gay (PS4FK) |
[135] Well erm in our organisation and it was in our submission that we felt that it er it should belong wholly to erm the employer erm it should belong to the beneficiaries as well, because we feel very strongly that the pension is deferred pay, it is deferred salary, and therefore they should have an ownership of part ownership in that fund. [136] They pay in six per cent of their salary, why should they be debarred from saying that they own part of those funds. [137] We feel that erm you know that they're both very good schemes an and well run, but we still feel that erm the e fund should not be owned entirely er by the employer. |
| (PS4FF) |
[138] British Steel? |
| Malcolm (PS4FH) |
[139] Thank you. [140] Well [clears throat] we consider that er pensions er contributions are deferred pay, including the employers contributions erm that the fund should be held on trust by the trustees and that the employer should have no ownership in it whatsoever. |
| (PS4FF) |
[141] Very good. |
| Ron (PS4FL) |
[142] Er I would, I would echo that, that we feel that they money has been paid in for work or services done by the employer and by the er fund members themselves have contributed and I don't think it belongs to either of those parties in ... any more, it's held by the trustees to pay pensions, if for nothing it's been put there just to pay pensions, it's not a piggy bank for er for companies to draw out with the with their tame er trustees allowing it, it it's money the trustees hold in ... in trust ... and I believe that's the law at the moment and er I I think we would like to see that confirmed in any new law. |
| (PS4FF) |
[143] Good, thank you. |
| Unknown speaker (JNPPSUNK) |
[144] [...] off [...] that, er I think several of us believe that the complexities of trust law at the present moment can make it very difficult if one [...] agreed. [145] Our own particular case is our case went to the High Court ... some three hundred thousand pounds, when perhaps if we'd had a dedicated pensions act setting out what could and could not be done, that would never have happened. |
| (PS4FF) |
[146] You, you have a history of legal actions don't you? |
| Unknown speaker (JNPPSUNK) |
[147] Sorry sir? |
| (PS4FF) |
[148] You have a history of legal actions [...] |
| Unknown speaker (JNPPSUNK) |
[149] Not we ourselves |
| (PS4FF) |
[150] No, no |
| Unknown speaker (JNPPSUNK) |
[151] but the companies which we belong. |
| (PS4FF) |
[152] [laughing] [...] doesn't it, yes [] indeed. [153] What's the state of play on the second one, did it were, were the trustees all dismissed, or did Brown Wilkinson's judgment stop that? |
| Unknown speaker (JNPPSUNK) |
[154] Erm th the net result of it the proposal [...] stopped dead, are those who did not wish to transfer, meaning the pensioners, had an increased inflation percentage as a result er pensioner representatives have been appointed, widows have had a increased pension. [155] How much of that flows from the court case,I I wouldn't like to say, but my guess is quite a bit. |
| (PS4FF) |
[156] So you won on that, didn't you, because the proposal was to be no increases unless you transferred, wasn't it? |
| Unknown speaker (JNPPSUNK) |
[157] Mm [...] |
| (PS4FF) |
[158] Yes, indeed. [159] Thank you. [160] ... Any ... other comments? |
| Unknown speaker (JNPPSUNK) |
[161] [...] it goes on in our case, that both of our pension funds have had massive surpluses, i.e. erm there was a reported surplus by Watsons the actuaries, of one point erm seven billion which suddenly er vanished within one year to a seven er [...] seven hundred million deficit and |
| Gay (PS4FK) |
[162] Er it er seven hundred and fifty three million |
| Unknown speaker (JNPPSUNK) |
[163] of course our members er of which we've got a hundred and twenty three thousand, flood the lines into Luton wanted to know what happens [giggle] they imagined a surplus as being some pot of er big tub of notes that they can dip it and we can dip into, but of course the surpluses have been used basically by British Telecom in particular for funding early retirement schemes er we're in no way in knowledge whether the money's every been paid back. [164] We've been told that er everything's done in, in the relation to the trustee [...] but of course when you're talking about massive sums of one point seven billion, our members er who are seventy five/eighty olds who suffered the problem of the inflatory years, their pensions haven't kept, kept pace with the with the people that are retiring now. |
| (PS4FF) |
[165] We're gonna come |
| Unknown speaker (JNPPSUNK) |
[166] Although although there's a lot of people who feel they're all living in the lap of luxury if you're Post Office or B T pensioners, they aren't and we haven't been able to get this surplus er in any way used for the benefit of those people and er and that's where the ownership of the fund really and the surplus are tied in together. |
| (PS4FF) |
[167] We're gonna, we're gonna stay on this issue of ownership and surpluses for a little time, cos it's actually so important, but it's not unreasonable for your pensioners to think that here was this pot of money to which one could dip into, but the only thing is the pot of money disappeared didn't it? |
| Gay (PS4FK) |
[168] Yes,an and what really upset the erm the, the members of the scheme and the pensioners was the fact that the money was going to actually erm fund the redundancy per programme er for the business and was going to the benefit of the employees and none of it was going to the actual pensioners. [169] Although they didn't, they didn't act illegally, they didn't say right, we're going to make the redundancy payment act, but what they did say you retire at fifty, we will make your we will enhance your pension to what you would have got at age sixty, we will enhance your lump sum to what you would have got at age sixty and erm give you a redundancy payment from the firm and obviously everybody fifty and plus they've gone in thousands, they had enormous waiting lists and then they had to say no, you can't go you know, too many people wanted to go. [170] What happened, people should have been paying in for ten years were suddenly taking out for ten years and these huge enormous sums and obviously the surplus which our members had helped to build up er and provide through the years and we've got seventy-five year olds on you know, extremely low pensions hardly making ends meet, and there were vast sums of money being given away to the employees, that the employers took a contribution holiday and so they weren't paying into the fund either you know, and all the profits of B T as you all know were soaring and partially because of the use of the pension funds and this has greatly obviously erm upset our members and we feel very strongly about it. |
| (PS4FF) |
[171] Right. |
| Malcolm (PS4FH) |
[172] As you [clears throat] are probably aware Chairman from the media that the British Steel National Association of British Steel Pensioners also have a problem with a surplus and are seeking legal advice as to what has taken place. [173] Er certainly the surplus was used to er create a new scheme for the present contributing members and er to the maximum benefit of the new sponsoring company, which er in the pensioners view er certainly er caused a great lack of security to the fund in our view of what they have done and er it is of in our opinion a matter of public concern and that we welcome the opportunity and I believe that you said previously that you're gonna come up on the ownership of surplus, so perhaps [...] getting away from it |
| (PS4FF) |
[174] We [...] absolutely no, no, you'll find we won't leave [...] this topic cos there's three people who actually want to come in now and I'm going to bring them in round the table. [175] Clifford first and then er |
| (PS4FF) |
[176] Can I take you back to the er the Good Report er about Trust Law,i it the report er concludes that it should be retained as the [...] framework for er occupation of pension schemes. [177] Now ... I M P A C say that they believe there should be a dedicated pensions act to replace trust law and the National Federation Post Office and B T pensioners say trust law should continue to be the basis of pension funds. [178] Could [laughing] tell [] could each of you tell us why you take a different view? [179] One way or another, I'm not quite sure what the ... the state of the [...] |
| Unknown speaker (JNPPSUNK) |
[180] We believe [...] now outdated, it was never designed to deal with the current situation the modern situation and when you are talking about [...] |
| Unknown speaker (JNPPSUNK) | [cough] |
| Unknown speaker (JNPPSUNK) |
[181] debts of some four hundred thousand million pounds, trust law does fall down. [182] The only recompe the only resource anyone has is to go to the courts, for the courts to decide what the law is at that present moment. [183] Now that's a costly business as we know to our cost, we didn't have to pay the three hundred thousand pounds, the pension fund did, but we had to risk paying those to go to court. [184] Now next year something else might happen and somebody may be forced to go to court, if they cannot go to court they cannot get justice and they have to wait to see what happens. [185] Now we have in the Companies Act a Table A which gives you a suggested er model, Memorandum of Association and Articles Association, why not a dedicated pensions act which says in here these are the minimum terms you must contain in your Trust Deed. [186] You can better them if you wish, but you cannot go below them. [187] People would know exactly where they stood then and we wouldn't have to go keep going to the courts to develop the theory of Trust Law. |
| (PS4FF) |
[188] So you'd leave the Trust Law in existence, so you wouldn't call cause a total legal revolution, but you would impose on that a spy ... of legal requirements which if trusts wish to through Trust Law enhance, they could, but they h all have to bring their agreements up to that minimum? |
| Unknown speaker (JNPPSUNK) |
[189] Up to that minimum yes |
| (PS4FF) |
[190] Yeah, very good. |
| Unknown speaker (JNPPSUNK) |
[191] A model, model trust deed. |
| (PS4FF) |
[192] Yeah. [193] Yes, B T? |
| Unknown speaker (JNPPSUNK) |
[194] [...] page two of your submission |
| Gay (PS4FK) |
[195] Yes. |
| Unknown speaker (JNPPSUNK) |
[196] [...] paragraph [...] |
| Unknown speaker (JNPPSUNK) |
[197] We felt that erm Trust Law had worked effectively erm you know over the years erm w we were happy with the extra powers that the er committee were recommending and the extra precautions that the committee were recommending that we brought in, but erm we would be happy with that backup to continue with the Trust Law. |
| Unknown speaker (JNPPSUNK) |
[198] Even in the situation that we find ourselves in with the Maxwell Pension situation, where we find that the ... the erm Trust Law didn't prevent the things from happening which did happen. [199] Do you still take that view? |
| Unknown speaker (JNPPSUNK) |
[200] But they hadn't got the backup of erm like th the regulator [...] appointed. [201] I'm sorry I couldn't hear everything that the Maxwell people were saying, sitting behind me,you you've lost their, their voice and you ... you know, I couldn't hear what they were saying. [202] But wi with the appointment of er of the regulator and the oth the other erm ... recommendations that were made by the report, we think with that backup w w we are still basically happy to continue with Trust Law. |
| Unknown speaker (JNPPSUNK) |
[203] Well I er er we I wasn't speaking about the, the evidence today, I'm speaking about evidences that have been taken in the past, where we had even trustees before the committee. [204] We informed the committee that regardless to the fact that they were trustees, they were in no position to challenge Mr Maxwell ... and under those conditions then they felt that the ... the law should be changed ... that the Trust Law wasn't sufficient ... to er look after pensions, because they felt that in certain circumstances in fact gave evidence to the committee, various people gave evidence along those lines, that they were almost powerless against Mr Maxwell and that's [...] . [205] ... That's why I'm surprised you, you take this [...] |
| Unknown speaker (JNPPSUNK) | [...] |
| (PS4FF) |
[206] Can I put Clifford's point to the point that we're still discussing er which is about the surplus and how both your legal frameworks you're advocating relate to the answers you've given us about surplus and the concern about surplus. [207] Now if I, am I right in saying that B T is happy to continue er with the present framework of Trust Law, because within that framework you've proposed to us er a er a body of ideas about the composition of the numbers of trustees and who they should represent, which would make it much more difficult for employers to raid the fund. |
| Unknown speaker (JNPPSUNK) |
[208] Yes, because you would have your pensioners and your employers, yes. |
| (PS4FF) |
[209] And B T so and Imperial who's had a different experience to you after a takeover bid from a new employer clearly wants a legal framework, steel braces put within Trust Law to make it much more clear where power lies in th the operati operation of the trust and ... that ... possibly one one of those steel braces would the law would relate on h who could get their hands on the surplus and in what conditions. [210] So to some extent your responses re i is quite naturally a response to the position you face with your employers isn't it. |
| Unknown speaker (JNPPSUNK) |
[211] Our response to it was of course that er since the Post Office was re released from the Civil Service in nineteen sixty-nine to trustee, to pen the trustees, there's been a minimum amount of trustees er I can recollect on those on the funds and we've not had any problem. [212] I don't think the management interferes with the fund like the Maxwell situation. [213] Certainly in our meetings with the with the presentations we get from the trustees every year about the fund, we meet the trustees, we haven't er any erm real worry of saying that the pension trust hasn't operated, because I think our the trustees of those two funds are much more independent than the Maxwell ones er were. |
| (PS4FF) |
[214] I'm not trying to put them on an equal par, but later Maxwell erm Action Group were concerned with four hundred and eighty million disappearing. |
| Unknown speaker (JNPPSUNK) |
[215] Yeah. |
| (PS4FF) |
[216] You've told us one point seven million disappeared in surplus |
| Unknown speaker (JNPPSUNK) |
[217] Well |
| (PS4FF) |
[218] Deficit. |
| Unknown speaker (JNPPSUNK) | [...] |
| Unknown speaker (JNPPSUNK) |
[219] Billions. |
| (PS4FF) |
[220] Billions, into a deficit erm that there are large ... the problem we're looking at now is these very large transfer of assets which people feel that they built up with their contributions and whether that's right or not. [221] [...] can I just ask British Steel, that I mean you're hearing the other two groups. [222] In a sense responding to our questions, naturally, depending on how they've been treated by their employer ... can we have your comments about the sort of legal framework you think the pension fund should be in and then Jeremy will take over. |
| Malcolm (PS4FH) |
[223] Right, well I think the biggest problem with Trust Law is that it expects too much of trustees. [224] It starts off essentially defining them as people who are impartial, and in no time at all we are talking about them being nominated from different sector interest. [225] However, I think the practicalities in the situation are that we have to face the fact that they are not going to behave impartially and you see we have a classic example in er the circumstances of our own situation as described by John. [226] We have an equal spit of company nominated and member nomina and union nominated trustees. [227] They basically carved up our surplus between them and each supported the other and overriding all of that is that each and every one of them was an active member of the scheme. [228] Now how under those circumstances do you achieve the impartiality that's supposed to be the cornerstone of Trust Law? |
| (PS4FF) |
[229] That's brilliantly put. [230] Right, Jeremy. |
| Ken (PS4FG) |
[231] Yeah, really the question I want to put is to the er B T Post Office er representatives, that y you made a perfectly reasonable objection to the way in which B T funded it's early retirement scheme from the pension fund. [232] Obviously this was challenged at some point. [233] What I don't quite understand is what was the legal basis on which they went ahead with this despite the objection, presumably as some of the trustees as to what was being done, I could hear we're talking of er a deficit of one point seven billion appearing or it a surplus disappearing into a deficit, which is actually four times as much has disappeared out of Maxwell. [234] Okay we know where it went and we know what it was used for, but er my question to you is, is it a legitimate use of a pension fund to fund a business development scheme which involves early retirement? |
| Gay (PS4FK) |
[235] Well we did take some er legal advice on it and we were told that it was not illegal, erm I mean we think it's highly immoral erm, but we were told it was not illegal, because they did not actually use the er the redundancy money did not come out of the fund, only this enhanced pension etcetera which was using up the, the surplus and we were told |
| Ken (PS4FG) |
[236] And it started the pension payments at a younger age or something? |
| Gay (PS4FK) |
[237] Pardon? |
| Ken (PS4FG) |
[238] They started paying [...] |
| Gay (PS4FK) |
[239] Yes, at fifty instead of sixty, they said you retire at age fifty and we will make your pension up to what you would have got at age sixty and we will also do the same with you lump sum ... and so now you know, this and they did that with thirty thousand I think went in one year, it doesn't take long to get rid of one point seven billion pounds when you're doing for that er that number of people erm and |
| Unknown speaker (JNPPSUNK) |
[240] I think the problem is that this one point seven billion was er an actuarial assessment by Watsons i it may never have been that amount of money. [241] Directly ... directly B T started erm saying well thirty thousand employees will go this year under B T ninety-two scheme i.e. they will go at fifty, they will draw their pension at fifty, which isn't [...] the trust deed and for many years Inland Revenue point blank refused to let anybody draw a pension below sixty. [242] They changed that, so the money er it's a bit different than the Maxwell, the money hasn't been erm a switched over to the Cayman Islands and all over the place, it's ... it's stayed in, in the [...] but of course we're told by the trustees and by our legal advice that nothing illegal's taken place, the money's been used to st er finance early voluntary retirement etcetera, etcetera. |
| Ken (PS4FG) |
[243] If the Trust Deed says the pension has to be paid at sixty, then the Trust Deed says it has to be paid at sixty, surely that you know, that's something you can't get rid of. |
| Unknown speaker (JNPPSUNK) |
[244] The schemes now are paid a pension at fifty, but the only, the only snag I understand is it isn't inflation, inflation proofed until fifty-five, but people are drawing their pensions and they get their lump sums at fifty and it's enhanced to take into account the actual and expected earnings for the next three years, so er you take thirty thousand people, one point seven billion can soon erm |
| Gay (PS4FK) |
[245] Disappear. |
| Unknown speaker (JNPPSUNK) |
[246] Can soon disappear. |
| Unknown speaker (JNPPSUNK) |
[247] Clarify a point here. [248] I if someone's their pension at fifty |
| Gay (PS4FK) |
[249] Yes. |
| Unknown speaker (JNPPSUNK) |
[250] and they had joined British Telecom at twenty, |
| Gay (PS4FK) |
[251] Yes. |
| Unknown speaker (JNPPSUNK) |
[252] Then they will have paid some thirty years |
| Gay (PS4FK) |
[253] thirty years yes. |
| Unknown speaker (JNPPSUNK) |
[254] into the pension fund |
| Gay (PS4FK) |
[255] Yes. |
| Unknown speaker (JNPPSUNK) |
[256] Presumably the maximum was about forty or was forty-five |
| Gay (PS4FK) |
[257] Forty-eight er yes. |
| Unknown speaker (JNPPSUNK) |
[258] Forty eight and and presumably many of the people who are perhaps seventy drawing pensions, they may not have even paid in thirty years themselves, I mean they may be many of them may not have been around for that period of time. [259] So in fact there may be a quality of treatment actually between someone retiring at fifty or fifty-five in terms of the number of years paid into the pension fund, as someone say age seventy. |
| Gay (PS4FK) |
[260] Well I doubt it actually at the moment. |
| (PS4FF) | [...] |
| Gay (PS4FK) |
[261] Pardon? |
| (PS4FF) |
[262] The operative word there is might. |
| Gay (PS4FK) |
[263] [laughing] Yes [] erm because I doubt it, erm at the moment with the fund that we're talking about the erm the close scheme, because most of these people in B T were originally erm in the Post Office, and of course when the they split erm then the erm Post Office workers went over to B T, they get a B T pension but in actual fact they paid into a pension scheme erm for many of them for forty years because they come into that age group, where so many people, you took a job when you were twenty o or or sixteen and you stayed with it for life, you didn't chop and change like people do these days and the majority of our members erm we can go down and I would say the vast majority of our members have actually worked for the Post Office or starting with the Post Office and then B T or staying with the Post Office for forty years, there's no end of them they've got in there forty years service. [264] So no, I can't agree there, that there is erm unequality, they think they are being hard done by. |
| Unknown speaker (JNPPSUNK) |
[265] [...] also history if I might just say that when the Post Office er split from the Civil Service, the firm was in deficit for twenty years and of course Post Office management say quite clearly that they were putting in sums of eighteen per cent of the pay bill ... when it was only supposed to be nine per cent of the pay bill and that's why they're entitled to the ... to the surplus. [266] B T say the same, that for twenty years the firm was in deficit and both managements put in much more than the Trust Deed says to keep us to keep the fund afloat. |
| Gay (PS4FK) |
[267] But that |
| Unknown speaker (JNPPSUNK) |
[268] Employees paid their six per cent of their erm salary. |
| (PS4FF) |
[269] Mm, yeah. |
| Unknown speaker (JNPPSUNK) |
[270] But the both ... until B T split from the Post Office, the Post Office put in if I remember rightly in negotiations those days er they were putting in something like fourteen per cent of the pay bill. |
| (PS4FF) |
[271] I don't want to get on to that |
| Unknown speaker (JNPPSUNK) | [...] |
| Unknown speaker (JNPPSUNK) |
[272] I think the point has been made er and let me er ask you to correct me if I if you don't i it's a fair assessment, the point that's really being made is there is a judgmental issue here as to whether a surplus arises from over-funding by an employer er substantial investment performance or or effectively unfair claiming between either the deferred pensioners or the pensioners and i it can be that all of those interests have to put into the pot and it's a judgment as to who actually is doing best in what circumstances. |
| (PS4FF) |
[273] I said I didn't want to get on to this area because it's you know, we could go on all night discussing whether this, well whether that. [274] We we ar it was really helpful if we are concrete in actually the answers that we give rather than speculative. [275] Jane. |
| Jane (PS4FP) |
[276] [...] doesn't it come back to the issue of wh who they trustees are and who's interest, given that trustees are expected to be independent, in the end, who's interests do the trustees represent, because I've had experience of working with a pension fund that was in massive surplus and the actualar actuaries refused to agree their final report until that surplus was dealt with, so that the trade unions and the employer through the trustees had to negotiate a way of ... spending that surplus and er given the pressures of the actuaries to say we were not allowed th the funds to continue unless you deal with this surplus, then it comes back to the issue of how the Board of Trustees is made up and if we accept that there is a degree of representation on that Board, then just exactly how that representation is divided. |
| Unknown speaker (JNPPSUNK) |
[277] Well in both our our er incidences what happens is that the actuary recommends what erm should happen. [278] Watsons actually recommended what should happen with both the surpluses and their recommendation was that both businesses should take a contribution holiday for the next three, five and maybe even be ten years in the Post Office, depending how investments go erm an- and there was no discussion erm between or negotiation between anybody. [279] That was recommended to the employers, the employers said yes, that's the action they would take, they put it to the trustees, the trustees agreed it and that was it. [280] Full stop. |
| (PS4FF) |
[281] Well i it's becoming slightly unfair because Watsons isn't on the stand, Watsons would also you know probably spell out in a little bit more detail, but their advice was comprehensive that there were Inland Revenue rules that it would put the tru and so on and one would want to s to say that tha that as well, but I do want to move on. [282] British, British Steel, yes? |
| Malcolm (PS4FH) |
[283] Yes,I I would like to come in to say how our er scheme was transferred from the er British Steel Pension Scheme to the new scheme in nineteen ninety. [284] Now once the benefits were approved er by the Trust Deed and er bearing in mind that the Chairman at that meeting informed the Trustee and I quote in determining the structure of the scheme the company was prepared to enter into consultation with the Trade Unions and Trustees, but this was a consultative process only and not a subject for negotiation; and [clears throat] their company then went on to seek the er er the transfer [...] of the present contributing members er ... er and a hundred of the members agreed er to transfer into that new scheme. [285] Now [clears throat] The Trust Deed and rules were asked for prior to their consent and the company made it clear that they would not be available until after the new scheme commenced on the first October nineteen ninety and indeed it was some eight days later on the ninth October at er Trustee meeting that the company presented the Trust Deed and rules and it was resolved that the Committee of Management would er transfer all the close scheme members er into the new nineteen ninety scheme and er ... the same Trustees appointed themselves er Trustees of the nineteen ninety scheme and one hour later were the presentation of a draft deed amending the British Steel Pension Scheme and a draft interim Trust Deed establishing the British Steel Pension Scheme in nineteen ninety and a draft Trust Deed and rules of the British Steel Pension Scheme of nineteen ninety were tabled for noting; and those very Trustees that were on the first meeting agreed to transfer the assets to the new scheme, set as Trustees of the new scheme one hour later, accepted the assets and er without er seeking either legal or actuarial advice and in this case er Watsons were advisors to the company to the old scheme Trustees and to the new scheme Trustees. |
| (PS4FF) |
[286] The difference though between you and Imperial Tobacco was that the Trustees went into the Courts didn't they? |
| Malcolm (PS4FH) |
[287] Yes. |
| (PS4FF) |
[288] [...] dissimilar. |
| Unknown speaker (JNPPSUNK) |
[289] The reason they went into Court though was that erm |
| Unknown speaker (JNPPSUNK) |
[290] I M P A C which was formed to protect the pensioners had threatened an injunction if they did not go to Court. [291] So er listening to the gentleman on the left er echoes of nineteen ninety High Court case. |
| (PS4FF) |
[292] Yes. [293] So you were saying who were threatening an injunction if you didn't go into Court? |
| Unknown speaker (JNPPSUNK) |
[294] We engaged a solicitor to look into the matter and he became convinced that there was I won't say a loophole, that there was a reason why this should not be done and er requested the Committee of Management to [...] to Court for advice. |
| Unknown speaker (JNPPSUNK) |
[295] This was done in the name of one of our pensioners. |
| Unknown speaker (JNPPSUNK) |
[296] And stated that if they did not do so, we would [...] an injunction to stop the proposals going through. [297] The Committee of Management took the advice and went to the High Court ... and as a result the proposal was stopped. |
| (PS4FF) |
[298] Jimmy? |
| Malcolm (PS4FH) |
[299] Yes, Mr Chairman it seems to me regarding [...] that you could drive a double deckered bus through the legislation, and |
| Unknown speaker (JNPPSUNK) |
[300] Goodey has not looked at it satisfactorily as far as I'm concerned and as far as many of the scheme members are concerned, I mean he has concluded that the employers are still entitled to er do what they like [...] with the surplus, the only thing that he recommends that they do it with the approval of the regulator himself, but he ... the other thing that the |
| Unknown speaker (JNPPSUNK) |
[301] Goodey has reported and concluded, that as long as they get their hundred per cent minimum [...] requirement they can still go on their contribution holidays, and many and my scheme members feel that this is just a [...] it's a freebie as far as they're concerned and scheme members don't do not benefit from the surplus and they would like to have seen or preferred to have seen |
| Unknown speaker (JNPPSUNK) |
[302] Goodey making a change for the benefit of the scheme members paying into a scheme, rather than employers going away in a contribution holiday. [303] Now is there any other er pension funds that do likewise or have any other [...] experiences as far as surpluses are concerned? |
| Unknown speaker (JNPPSUNK) |
[304] I I find [...] issue with one point in the Good Report, when he mentioned that a surplus is a notional surplus, it cannot crystallize until the fund actual close down. [305] If it is in fact a notional surplus, then why is the employer allowed to take money out of that notional surplus, he's taking real money out of from a notional surplus, it should not be allowed. |
| Unknown speaker (JNPPSUNK) |
[306] [...] told you didn't he that the [...] surplus the only way one would know there was a surplus there was when the fund was closed, when every pensioner had been paid [...] money left. |
| Unknown speaker (JNPPSUNK) |
[307] But in view of the fact that different actuaries can come to different answers and Professor Good quotes one where a difference of half per cent gives rise to a difference of a hundred and sixty seven million. [308] How does one know and I accept Professor Good's point what the exact amount of that surplus is. [309] There may be in fact a deficit, and yet we still allow the employer to take money out. [310] Now if we're saying you cannot ascertain this surplus, then why is the employer allowed to take money out? |
| (PS4FF) |
[311] Right. [312] B T? [313] Would you like to respond to Jimmy's question? |
| Unknown speaker (JNPPSUNK) |
[314] Well we were disappointed in the Good Report because er they did say it was one of the major issues, and yet they said that they didn't think any sweep in changes are needed which rather erm contradicted the earlier part of our report, we would have thought there were erm changes needed. [315] A group of our [...] here is largely actuarial surpluses and one doesn't really know whether there's a surplus [...] things keep changes. [316] The actuaries go to the employer to find out what their plans are. |
| (PS4FF) |
[317] [...] British Steel how you go that answers a really good way of putting it. [318] Thank you very much. |
| Malcolm (PS4FH) |
[319] Well British Steel adopted a somewhat more subtler tactic er they make a strong point of the fact that no money has ever been removed from the scheme despite the presence of a six hundred [...] surplus. [320] What they did is took half and used it to reduce their contributions and it was a large reduction, it was a reduction from twelve to currently five per cent. [321] Er okay, different words to describe the same and indeed they didn't take [...] out of any fund, but they achieved the same end result. |
| (PS4FF) |
[322] Jimmy? |
| Malcolm (PS4FH) |
[323] Well if this is the case then you don't see that any recommendations in Goodey would stop that kind of thing happening and if you don't see that, what recommendations would you make to the Committee that Goodey should put any report that would stop that kind of thing happening. |
| Malcolm (PS4FH) |
[324] Well the fear of boring you because I've said it before, I think that either a Trustee made up of an equal balance of members from the various interested groups which is very difficult to achieve in practice ... and additionally independent trustees certainly in our case, we believe would have stopped it happening ... because the movements in the direction it went was clear ... now that we have the information in front of us to the Trustees, it was quite clear what was gonna happen and nothing was done about it. [325] Now we didn't have a voice, remember we were never even informed before or until two years later after the event that it had happened. [326] There are still British Steel pensioners from the old scheme who genuinely do not know that there exists a new scheme. |
| Malcolm (PS4FH) |
[327] Do you not believe that with this recommendation where |
| Unknown speaker (JNPPSUNK) |
[328] Goodey has said that the regulator has got to give his approval that would stop that? |
| Malcolm (PS4FH) |
[329] The problem there I would suggest is the timescale between the things happening and it getting to the regulator and being digested. [330] In the present |
| (PS4FF) |
[331] [...] didn't understand the two years, I mean he would have told the regulator. |
| Malcolm (PS4FH) |
[332] Yes. [333] Erm ... whereas if there were independent trustees responsible to the regulator and they were properly trained, they would I suggest be able to smell out very quickly any malpractice and would have [...] straight to the regulator, if only to call a stop for someone to have a look at it. |
| Malcolm (PS4FH) |
[334] [...] nothing recommended with Goodey in that particular cause is of any good. |
| Malcolm (PS4FH) |
[335] I don't think so. |
| (PS4FF) |
[336] Have erm Imperial? |
| Michael (PS4FN) |
[337] [...] belief is that er if you get the trustee balance right, that's the first place where the decision ought to be made, but there should be a fall-back position which Good has given, which they the trustees could go to the regulator in the case of er not being able to solve things, but are feeling very much on surpluses, that the money is there first of all to pay pensions and until pensions are paid up to Inland Revenue levels, whatever they are, then no money should go back to the company. [338] The question of taking pension holidays in between out of surplus is a sort of mid midway position, but er very definitely we feel strongly that money should not go to the company. [339] We have suffered from the same thing as the other two er Abalance have said today of money being used from our surplus to provide for redundancy and erm i it's been exacerbated by money being available from the people who are made, made redundant, going to the company and swelling their balance sheets, while all the cost side of it comes out of the pension fund and that has caused a lot of ill-feeling particularly from the older pensioners who have seen years of inflation when their pensions were not made up to the same extent. [340] In the old days when there was a possibility of ... of erm ad hoc payments made, er that sort of thing was taken of, since the takeover of the company, that hasn't happened to the same extent so there's a very strong feeling with the older pay er pensioners that they paid money into a pension scheme which now shows a surplus, but other people are benefiting from it. |
| (PS4FF) |
[341] We need [...] we've got lot's more questions to ask you. [342] Peter? |
| John (PS4FJ) |
[343] Erm, Mrs Appleby you mentioned briefly earlier the role of the regulator. [344] How do you see the regulator doing his job with a hundred and twenty eight thousand schemes to, to monitor? |
| Gay (PS4FK) |
[345] Great difficulty [...] |
| (PS4FF) | [laugh] |
| Gay (PS4FK) |
[346] Erm ... er well we welcome the erm ... e er er the proposal that there should be a regulator. [347] Somebody er to whom the erm er er matters could be referred er whom er could remove trustees er who are er not acting in er the best interests er of the fund erm to whom er I understand that the erm beneficiaries could er appeal if they felt that their fund was being erm used i in the wrong way which is something that we haven't got at the moment erm I mean just going very, very briefly back to the question that you asked erm about this how would you stop what's happen happening is by having, we would have thought a pensioner trustee, because even the question has been asked how did it get through the union trustees and the answer is that most of them are employed, and they are looking over their shoulder because jobs are going and redundancies are being made. [348] You've got a pensioner employee er a pensioner trustee on there and they're not looking over their shoulder for their job, they are going to do the job of a trustee and watch the funds, and they would then be able to go to the regulator if they saw something that was amiss. [349] Whereas somebody who is employed by the firm might be very worried about doing because they're more bothered about keeping their job. |
| (PS4FF) |
[350] So th the case you're putting that the that the pensioner trustee er ship is more powerful than you originally put cos until now you've been put it in grounds of i the trust should be repre representative of it |
| Gay (PS4FK) |
[351] Yeah |
| (PS4FF) |
[352] Now you're saying erm rather well, that in fact that person or persons could be more independent |
| Gay (PS4FK) |
[353] Yes. |
| (PS4FF) |
[354] Because they're actually not worried about being sacked |
| Gay (PS4FK) |
[355] Yes. |
| (PS4FF) |
[356] either erm because redundancies are coming up, or [...] Imperial trustees down, they were just got ridden of as a way of moving them off the trust. [357] Yeah, very good. |
| Unknown speaker (JNPPSUNK) | [...] |
| Unknown speaker (JNPPSUNK) |
[358] [...] in our case the unions approved our proposals of the company, they raised no objections ... it was only the [...] who raised objections, the employees didn't and in the High Court case, we've just said, how can an employee be independent when he depends upon his employer for his future work. |
| (PS4FF) |
[359] So, really what you're saying is that if we're looking at trip wires to stop things happening, there's a powerful a really powerful case for a pensioner trustee looking for whistle blowers. |
| Unknown speaker (JNPPSUNK) |
[360] Yes. |
| (PS4FF) |
[361] There's also a powerful case for having pensioner trustees [...] there's far less chance of erm people twisting their arm, although they could have the character. |
| Malcolm (PS4FH) |
[362] [...] and that's where independents come in. |
| (PS4FF) |
[363] But, but, but that's a problem we all face. |
| Unknown speaker (JNPPSUNK) |
[364] And we're also saying that if you have a new pensions act, the work of the regulator would be much easier. |
| (PS4FF) |
[365] Why? |
| Unknown speaker (JNPPSUNK) |
[366] He won't keep have to be going off to court to find out what is the law at that moment of time. |