Comments for Pensions Talk

Comment on Age discrimination – justification on the grounds of cost? by Stephen Richards

Stephen Richards — Tue, 10 Jan 2012 10:43:13 +0000

Thanks for your comment. The Court of Appeal has not yet handed down its decision but I will be looking at it when it does.

Comment on Age discrimination – justification on the grounds of cost? by Anon

Anon — Mon, 09 Jan 2012 12:54:35 +0000

Is there an update on what view the Court of Appeal has taken?

It is a shame that an individual has been made redundant due to his age, especially after the many years he had worked for the PCT.

Anti discriminatory practices and law’s should be safe guarded to ensure a fairy society. To fight to legalise breaking these law’s for monetary gain is to me immoral.

Comment on NAPF Manchester: Postcard from the edge by Pensions Bear

Pensions Bear — Mon, 24 Oct 2011 11:33:35 +0000

Good to see an entirely unbiased and non-partisan view from Darling. No doubt Blackadder would come up with a more scathing put down…

Comment on Auto-enrolling workers into pension saving – but who are the workers? by Helen Powell

Helen Powell — Mon, 05 Sep 2011 09:07:25 +0000

Thanks Ian for your comment – as you say, the ‘ordinarily working’ formula raises some potentially interesting issues. In fact the Court of Appeal’s judgment in Crofts was upheld by the House of Lords in 2006 (http://www.publications.parliament.uk/pa/ld200506/ldjudgmt/jd060126/serco-1.htm). The judgment usefully considers the positions of peripatetic and expatriate workers, and gives a couple of examples of when an expat worker based entirely abroad might still be considered to be ordinarily working in Great Britain. There could be some surprises for employers assessing their workforce!
Draft clauses in the Pensions Bill aim to clarify the position for some of the other complex cases like seafarers and offshore workers. Perhaps usefully, the consultation paper (http://www.dwp.gov.uk/docs/ia-workplace-pension-reform.pdf) includes the following comment, which reflects the ‘base’ test without using that particular language, and says that the same test is used for land-based workers:
2.11 The Government propose to treat seafarers and offshore workers in the same way as land based workers and bring them within the scope of the automatic enrolment provisions in Part 1 of the Pensions Act 2008 if they are working, or ordinarily work, in Great Britain under the worker’s contract.
2.12 The ordinarily working element of the test is the same as that which applies to land based workers and would ultimately rest on case law. For a seafarer, that might include someone whose journey starts and ends in a domestic port, though there would be other cases where a seafarer could be considered ordinarily working in Great Britain. For an offshore worker, it might include someone who starts and ends their tour of duty on an oil rig on the UK continental shelf. As with land based workers, the location of the employer or agency would not be a determining factor, nor would the nationality or residency status of the worker, or in the case of a ship, where it is registered.

Comment on Auto-enrolling workers into pension saving – but who are the workers? by Ian Neale

Ian Neale — Mon, 05 Sep 2011 08:40:18 +0000

Just read your latest Pensions Talk posting; interesting, because I was looking today at the question of the meaning of ‘ordinarily working in Great Britain’. As you say, there is no legal definition. Case law seems to largely defer to what Lord Denning said, most recently quoted I think in the Court of Appeal case of Crofts & Ors v Cathay Pacific Airways Ltd & Ors (http://www.bailii.org/ew/cases/EWCA/Civ/2005/599.html ):

“The ‘base’ test, if I may say so, is a good sensible way of overcoming the literal meaning of the words ‘ordinarily working’ in the statute*. It affords good guidelines for the tribunals which have to deal with so many of these cases. A man’s base is the place where he should be regarded as ordinarily working, even though he may spend days, weeks or months working overseas. I would only make this suggestion. I do not think the terms of the contract help much in these cases. As a rule, there is no term in the contract about exactly where he is to work. You have to go by the conduct of the parties and the way they have been operating the contract. You have to find at the material time where the man is based.”

* Lord Denning was referring to The Trade Union and Labour Relations Act 1974.

I wonder if you agree, or whether there is a more recent or more reliable authority?

Comment on Equalisation of guaranteed minimum pensions: a blessing or a curse? by Pensions Bear

Pensions Bear — Tue, 30 Aug 2011 09:53:05 +0000

I suspect that, for all but the most recent and the largest value buy outs sleeping dogs will be left to lie in respect of GMP equalisation – with both the insurer and trustee having got on with their lives and members blissfully unaware of the issue. An interesting sub-category will be those policies where the insurer has accepted GMP equalisation risk – will the insurer proactively go back and check its contracts and compare any increased/new legal obligation to what it has done or will these dogs remain sleeping also?

Comment on RPI/CPI for pension schemes – the story continues by Pensions Bear

Pensions Bear — Fri, 04 Feb 2011 18:16:00 +0000

This feels like a cop out from a Government who has bowed to pressure and wishes to avoid further bad publicity for ’stealing member’s pensions’. Whilst there’s no ‘right’ or ‘wrong’ on this (what’s good for pension scheme funding is bad for the value of member’s benefits) there is certainly a barely logical inconsistency in the treatment of pension schemes.

Comment on Lehmans financial support directions: Who’s afraid of the big bad wolf (or the Pensions Regulator)? by Visteon Pensioner

Visteon Pensioner — Thu, 11 Nov 2010 15:14:11 +0000

And the Regulator walked away from a claim against Visteon Corp for US$800 million to support the collapsed Visteon UK because of the low value of Visteon assets. Visteon Corp is a global company and to now appears to have significant assets around the world, high value work committed by the mother company and two companies still operating in the UK.

Our message to MPs in our campaign for investigation into Ford dumping our scheme and Visteon acting to dump liabilities is from our experience tPR is without any teeth. Visteon company trustees agreed to long term funding plans to recover the huge deficit inherited from Ford and made worse by Visteon whilst at the same time taking part in plans to close the business at the same time, having shifted their own pensions to a ‘new’ company.

The Regulator has been interested and polite but nothing has happen – even with this level of scandal.

http://www.visteonpensionactiongroup.co.uk

Comment on RPI/CPI indexation for pensions – Oh what a mess! by Jerry Gandhi

Jerry Gandhi — Mon, 09 Aug 2010 11:01:33 +0000

I agree entirely Dana but it gets even more complicated and harder to manage when it becomes allowed but optional. As you point out many schemes and organisations have been through various mergers and consolidations so if its left to what can be agreed – it will always end up either a long and difficult fight between Company/Trustees or a leveling up of the benefit.

We have multiple schemes with differing elements of hard coded RPI provisions and some where indexation is at fixed rates. The only “easy solution” to be able to move to CPI in any form is to have the rules overridden – for both future and past (ideally).

Maybe easier if the government simply reshaped the RPI basket to the same constituents as the CPI – I know there is also a methodology issue but again could that not be handled by evolving the index known as RPI?

Maybe too simplistic but ……. we are trying to make pensions simpler!

Comment on RPI/CPI indexation for pensions – Oh what a mess! by Brian Spence

Brian Spence — Mon, 09 Aug 2010 10:28:14 +0000

Totally agree that this government policy has not been thought through. The whole of the public sector have suspended transfer value quotations and much of the private sector too while the issues are worked through from a legal, actuarial and administrative viewpoints. We have highlighted in our blog the problem in relation to the specific issue of pensions on divorce. http://www.spenceandpartners.co.uk/archives/pensions-on-divorce-impact-of-pensions-increase-changes/