Following the collapse of Carillion leaving a pension deficit of up to £900m, Theresa May has pledged to stop “executives who try to line their own pockets” at the expense of workers’ pensions.
Stuart Price, Partner and Actuary at Quantum Advisory, agrees although thinks it still won’t be enough.
Stuart said: “While members of pension schemes are protected with compensation from the Pension Protection Fund, benefits will generally be lower than what they were expecting. As the Prime Minister says, schemes should look to recoup additional funding from Directors – and ex-Directors as was the case in BHS – although in many cases I doubt this would be enough to allow members to get their full entitlement.
“I believe more onus should be on ensuring defined benefit schemes are adequately and continually financed and receive their fair share of contributions versus payments to Directors and Shareholders. In this instance, if anything did happen to the company, the scheme is more likely to be well funded and therefore has more chance of honouring the benefits promised to members, without the scheme having to enter the Pension Protection Fund.”
Stuart Price, Partner and Actuary at Quantum