Defined Benefit 

Field writes to regulator over Bombardier pensions

Field writes to regulator over Bombardier pensions

Frank Field has questioned The Pensions Regulator (TPR) about its involvement with Bombardier and its defined benefit (DB) schemes, as the company is struggling to cut costs.

The aerospace and transport company announced a restructuring programme on November 8 which it said will result in a reduction of approximately 5,000 jobs globally over the next 12 to 18 months.

Bombardier employs 4,000 workers at four locations in Northern Ireland, mainly in Belfast, with union Unite considering this announcement a "brutal blow".

In a letter to Lesley Titcomb, TPR’s chief executive, the chairman of the Work and Pensions committee and independent Labour MP pointed to several DB schemes in the UK, some of which were in a shortfall position.

Bombardier Transportation UK Limited had an aggregate pension surplus of £58.6m in 2017. However, four of the eight funded DB schemes it sponsors were in deficit, to the combined value of £44.1m, Mr Field noted.

The Short Brothers Pension Scheme, the pension fund for Bombardier’s aerospace division, had a deficit of $253m (£197m) at end of 2017, he added.

Mr Field is asking for details about the watchdog’s engagement with the company, specifically regarding the deficit in Bombardier Aerospace’s DB scheme.

Earlier this week, Mr Field sent another letter to TPR inquiring about the watchdog’s involvement with the Johnston Press DB scheme, which has entered assessment at the Pension Protection Fund (PPF) after the sale of the group to JPIMedia.

Mr Field believes as the employer was sold on there was no need for this rescue measure.

The PPF, created under the Pensions Act 2004 and funded by DB schemes, is designed to protect members if their defined benefit pension fund becomes insolvent.