How do you turn a faltering enterprise into an attractive investment? Sadly, yet another company is answering this question by shaking off responsibility for its employees’ pensions.
Bernard Matthews is a struggling turkey firm, and its private equity owners, Rutland Partners, are trying to come up with a rescue plan. But it doesn’t seem to include helping employees.
The plan hatched is to sell off the business, but dump the bill for workers’ pensions on the Pension Protection Fund. The Work and Pensions committee has heard from an accountant how the deal planned will “extract maximum cash from the company”. By contrast, the terms of a pension bail out means some workers’ retirement pots could be cut by 10 per cent.
The Pension Protection Fund is supposed to be a last resort, ensuring people’s savings don’t disappear in the event of insolvency, funded by a levy on other pension schemes.
But this is not the first time that current and future pensioners have lost out to the greed of company owners. Phillip Green’s deal to dump the pension deficit of the department store BHS is still under investigation by the Pensions Regulator and the Insolvency Service. Now the Serious Fraud Office is also asking questions.
How is this being allowed to happen? Too busy with Brexit, Theresa May’s chaotic government has offered no answers to pensioners that are losing out. Such inaction undermines any claim the Tories have to be a party of working people. It is up to Labour to fight to ensure that promises made to employees who have paid in all their working lives are not undermined by unscrupulous employers.
That’s why I am calling for the Pensions Regulator to intervene to stop the so-called “pre-package administration deal” made over Bernard Matthews, and ensure that the £20m pension deficit is met from the £39m Rutland Partners are expecting to receive.
But fixing this one deal is not enough. We must put an end to the dumping of defined benefit pensions once and for all. I am developing proposals to strengthen pension fund governance, and enhance the ability of the Pensions Regulator to intervene earlier in the process of administration. Where there is evidence of foul play, the Regulator should have the powers to force companies to make good on their promises to pensioners, before they profit themselves.
This government is making a mess of pension policy. I believe in a transparent and fair pensions system, that provides dignity in retirement, and will do everything in my power to shine a spotlight on evasion of liabilities, and restore confidence in the pension promise.