Company pension schemes were always a con because they have always been prey to the greed of company bosses.
The fatcats bleed any profits into their own salaries and then, when the firm falls into financial difficulties, they see this large, untapped source of cash just sitting around untouched, and dig into it.
Or, when they try to sell the company, they find that nobody wants to touch it because the pension scheme is now a liability.
Either way, it is a noose around a firm’s corporate throat.
The only workable pension scheme This Writer has seen in the UK is that which is run by the UK government – and even then, only when the government isn’t being run by Conservatives.
Isn’t it time we all admitted it?
A sale of Tata’s loss-making steel operations could be derailed by a government split over how to deal with its giant £15bn pension scheme.
Business Secretary Sajid Javid is due to hold talks with Tata’s board this week to discuss bids received for the business by today’s deadline.
It is understood that Mr Javid, having said that the Government is willing to take an equity stake of up to 25pc alongside a new owner and offer “hundreds of millions” in financial support, is desperate to see a deal secured but potential buyers are refusing to take on Tata’s massive UK pension scheme.
To get over the hurdle, sources close to the sale say the Department for Business (BIS) is supporting a radical proposal backed by the fund’s trustees which would see the fund “spun off” as a separate entity and effectively become a new scheme.
Under this plan, members would be given a choice of entering the Pension Protection Fund (PPF) or joining the new, spun off scheme, with less generous benefits. In a bid to get this idea of the ground, Tata could contribute a lump sum and the Government would help to underwrite it for several years.
However, it is understood that the Department for Work and Pensions (DWP) is resisting the idea amid serious questions about the plausibility of a move seen as high risk and flouting the current pensions framework.
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