OpinionAug 3 2016

BHS – the unacceptable face of company pensions

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As I pen these words, the disturbing sequence of events surrounding the closure of BHS continues to emerge. With a plot too far-fetched to be considered for a Jeffrey Archer novel, it is increasingly evident that a way must be found to prevent such disasters happening again.

If Sir Philip Green makes no move to clean up his “mess”, and it is worth bearing in mind it appears to be only a moral, rather than legal, obligation, then the money will come from the Pension Protection Fund.

Thank goodness for that, as it is vital that these 20,000 workers have some sort of safety net they can rely upon to ensure they are not left destitute in their later years by a set of circumstances outside their control.

If Philip Green makes no move to clean up his “mess” then the money will come from the Pension Protection Fund

It is absurd there are not tighter controls in place to oversee the proper funding of final salary schemes.

In particular, pension trustees must be given a much greater influence, including the power to potentially block deals which appear likely to jeopardise the schemes’ beneficiaries.

When you, as an adviser, put a personal pension in place, you rightly have to undergo a number of processes to ensure you are putting the client’s best interests first and that you have performed proper due diligence.

Of course, the owners of BHS would claim they were not advising on the pension scheme, but it is inconceivable that the board was not formally advised of the dire funding position of the company’s pension scheme on a regular basis, and it beggars belief that a business transaction which affected so many people could take place without any sort of government engagement or regulatory oversight.

Our sector is working incredibly hard to promote the benefits of saving to consumers and to ensure that the interests of our clients are paramount.

It is therefore frustrating in the extreme to have high-profile situations such as that at BHS creating fear and mistrust of pensions and financial services.

The report into the BHS collapse referred to the “unacceptable face of capitalism”; a judgement with which it is impossible to argue.

I believe it is imperative that society as a whole ensures such situations are no longer tolerated, and for the government and the regulators to make sure such alleged practices are brought to an abrupt end.