February 2010
'British pensions at mercy of foreign owners' Danny Vassiliades comments:
"The UK regulator doesn't have any jurisdiction overseas, so employees should be aware that they can only rely on the UK operation to pay their pensions.
"If the UK firm gets into difficulties, they can't rely on being part of a big global group to bail them out. It's not a question of what is right or what is wrong. Big companies based overseas will have to ask themselves: is there a case to direct significant capital to the UK to pay into a pension fund, or should they divert that money somewhere else around the globe where it can be invested more profitably?" The Scotsman Business, 27 February 2010
'Analysis: Why was RD allowed to sink?' Punter Southall is quoted:
Punter Southall says the key issue for the regulator could be one of "moral hazard".
The consultant explains: "The Pensions Regulator may be thinking that the interactions with the US parent are part of the cause of the potential UK insolvency and thus looking at a bigger picture.
"The accounts of the UK company, albeit considerably out of date, do show a large intercompany balance which might suggest that an argument could be created that there is an unhealthy relationship between the UK and US companies such that it would be reasonable to use the ‘moral hazard' powers." Professional Pensions Online, 26 February 2010
'The road to freedom' Danny Vassiliades is quoted:
That may seen a bold statement, but as Punter Southall principal Danny Vassiliades puts it: "A lot of trustees and sponsoring employers have learnt there is a lot of risk in pension schemes and that the only way to take it out is to purchase bulk annuity". Vassiliades adds: "Price determines the whole decision-making process; there is no other driver for why there are not more buyouts." Professional Pensions, 25 February 2010
'Why was RD allowed to sink?' Punter Southall is quoted
Punter Southall says the key issue for the regulator could be one of "moral hazard". The consult explains "The Pensions Regulator may be thinking that the interactions with the US parent are part of the cause of the potential UK insolvency and thus looking at a bigger picture.
"The accounts of the UK company, albeit considerably out of date, do show a large intercompany balance which might suggest that an argument could be created that there is an unhealthy relationship between the UK and US companies such that it would be reasonable to use the "moral hazard powers". Professional Pensions, 25 February 2010
'Punter Southall Appointed' Gerry Devenney is quoted:
The Punter Southall team will be led by principal Gerry Devenney based in Edinburgh.
He said: "We are delighted to have been appointed by such prestigious and long standing firm as the Mayborn Group which has such strong global brands. This underlines the strength of our operation in Scotland." Professional Pensions, 25 Feb 2010
'Reader's Digest 'may be the first' to go bankrupt over pensions' Danny Vassiliades is quoted:
“There is a small minority of companies that have been outgrown by the scale of their pensions problem. Reader's Digest may be the first example of this problem coming home to roost.” Financial News Online, 18 February 2010
'Strength of parent firms could impact PPF levies' Kevin Burgess is quoted:
Kevin Burgess, senior consultant at Punter Southall, said: 'Scheme sponsors should be aware of the proposals and should consider taking action now.
'The proposals, if implemented, will impact the 31 March 2010 failures scores assigned by DandB so there will be little time to take action after the PPF finalises its methodology.
'The deadline for providing data to DandB is 30 March 2010 for the 2011/12 levy and the board of the PPF is expected to confirm early this year if this proposed change will be fully implemented.
'The PPF proposed to instruct DandB to reduce failure scores of the scheme sponsor if the domestic ultimate parent or global ultimate parent have a very low score.
'Therefore, scheme sponsors should check that DandB has the correct details regarding who the domestic and global ultimate parents are and then monitor their failure scores in the same way as the scheme sponsor.
'To prevent potentially large levy increases if the PPF's proposals are adopted, companies should take action now to improve the scores of parent companies. In the most extreme example, for a scheme where the sponsor currently has a failure score of 100, the levy could increase 100 times if the relevant parent has a low score and the PPF implements its proposals,' Burgess added Employee Benefits Talk (online), 9 February 2010'Pensions black hole could be £70bn' John Prior is quoted:
John Prior, head of public sector outsourcing at Punter Southall, right, said the firm’s latest analysis indicated that councils were facing significant increases in their pension-scheme contributions.
“Even if the situation improves during the first quarter of 2010, the LGPS will almost certainly be facing a significant deficit,” he said.
“This in turn will increase the amount that Local Authorities have to pay into the LGPS from 2011, unless the LGPS adopts a lower funding target than that used in previous valuations.
“Moving the funding goalposts in this way, as considered in a Government consultation paper last year, would reduce the immediate pressure on town-hall budgets by effectively deferring the impact to future generations of taxpayers.” LGC, 3 February 2010
'Local government pensions face £70 billion deficit' John Prior comments:
'Although the results of the forthcoming LGPS valuation will not become known until some time after the valuation date of 31 March 2010, our analysis indicates that at the end of 2009 the LGPS might have had assets of only 60% of the estimated amount required to meet its liabilities to current members. Such a funding level would imply a deficit of around £70 billion,’ said John Prior, head of public sector outsourcing at Punter Southall. Citywire, 3 February 2010
Punter Southall Pensions Bulletin - July 2010