UK - Scheme members are inundating trades union law firm Thompsons with requests for legal advice on "Bradstock-style" deals.
It says members often wrongly believe they will be better off under the Pension Protection Fund and are unhappy at the compromises trustees reach to try to keep a scheme sponsor afloat.
Thompsons partner Ivan Walker said: “There is a constant stream of inquiries from various trade unions saying that an employer is on the brink of insolvency.
“It puts the trustees in a terribly difficult position where they are signing up for compromise deals which take up less than the statutory debt, in the knowledge that they are going to do better out of that than they would out of the PPF.”
“It is very difficult for the trustees to say ‘Yes, we compromised your rights, but it was the sensible thing to do’.”
Trustee Code of Practice board chairman Brian Holden (pictured) believes the prevalence of Bradstock deals shows that trustees must build a closer and more open dialogue with scheme sponsors.
He said: “Trustees nowadays must be aware to a much greater extent of the affairs of the sponsoring employer.
“There must be a good business relationship between both parties and the trustees more than ever should seek to obtain financial and other information about an employer on a regular basis.”
He added that trustees should be aware of past promises made by a sponsoring employer to guarantee the solvency of their scheme or to guarantee to make good any deficit over a period of time.
Guy Opperman has rejected calls to speed up changes to auto-enrolment (AE) despite increasing pressure to boost contribution rates and overall savings pots.
Pensions and Benefits UK 2019 is delighted to announce the launch of our programme for this year, celebrating 20 years of bringing you the latest updates on all things pensions and employee benefits. Register for your place today!
PP has compiled a list of what to watch out for over the coming months.
Willis Towers Watson's LifeSight is the first master trust to be granted authorisation by The Pensions Regulator (TPR).