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Articles Pensions 17th Dec 2018

A Christmas Carol by Freeths

The Pension Scheme Trustee was dead. There is no doubt whatever about that. The register of its burial was signed by the lawyer, the actuary, the pension consultant and the accountant. Trustee Scrooge signed it, and Trustee Scrooge’s name was good for anything he put his hand to. The Pension Scheme Trustee was as dead as a doornail.

A mean spirited miserly old Trustee Scrooge sits in his office on a bleak Christmas Eve. The secretary to Trustee Scrooge, Bob Cratchet, shivers in his anteroom as Trustee Scrooge refuses to spend money on heating. Visitors to the office asking for contributions to the Christmas charity get nothing but bitterness and venom; Trustee Scrooge spitting out an angry, “Bah humbug!”  There is nothing left to do or change in the pensions world – it is all coming to an end. There is no place for trustees.

In his apartment later that evening, Trustee Scrooge receives a chilling visitation from the ghost of his dead nemesis, the Pension Scheme Trustee. The Pension Scheme Trustee explains his spirit is doomed to spend its life wandering the earth, weighted down with heavy chains – his punishment for not looking at the positive role pension trustees play. He hopes to help Trustee Scrooge avoid the same fate and informs him three spirits will visit him on each of the next nights.

The following evening, the ghost of Christmas past, a strange lurking phantom presence with a large glowing head, appears. It escorts Trustee Scrooge on a journey into the past to previous Christmases where he re-visits his early days as an adviser, with numerous pension schemes, and his time as a Chairman of a large and thriving final salary scheme, dealing with the EU cases in the 1990s – implementing equalisation and Pensions Act reforms – the toing and froing of the 1990s and 2000s about how GMPs for those schemes, that had contracted-out benefits like his own, needed to be equalised, and the various methods that were put forward and rejected. Finally, the time just before he ceased to be a trustee of the scheme, when there was no clear path for equalising GMPs save for the PPF. Before leaving him, the ghost said “Trustee Scrooge, there will be more cases to decide how GMPs should be equalised. It could end up costing schemes billions of pounds to deal with GMP equalisation. There will be difficult and complex things for trustees to consider, now is not the time to give up dealing with these types of matters.”

The following evening Trustee Scrooge is visited by the ghost of Christmas present, a gigantic, creature hideous to behold.    He takes Trustee Scrooge around the UK to reveal what is happening this Christmas. He watches the Pensions Regulator carefully issuing one fine every five minutes to employers who failed to deal with auto-enrolment in accordance with statutory requirements. He sees Bob Cratchet’s son, Tiny Tim, receiving a present from Bob, who has used pension monies he has saved and drawn using his flexible lump sum. The spirit takes Trustee Scrooge to a Christmas party, a jovial gathering where employers and employees who have implemented a review of their automatic enrolment scheme celebrate a successful re-enrolment. Trustee Scrooge pleads to stay until the end of the festivities. As the day passes the Spirit becomes older and, at the end of the day, he shows two starved children – Ignorance (of the need to change) and Want (to reform and improve benefits for the future) living under his coat.

The next day, the ghost of Christmas yet to come leads Trustee Scrooge through a sequence of mysterious scenes relating to an unnamed employer. Trustee Scrooge sees businessmen discussing the employer’s improved profitability and shareholder value. Some vagabonds trading second-hand goods produced by the employer, and a poor couple expressing relief that they won’t have to go into the PPF and will get a full pension. Trustee Scrooge is anxious to learn the lesson of Christmas yet to come and begs to know the name of the employer. The ghost of Christmas yet to come points to a sign above. Trustee Scrooge is shocked to realise it is the sponsoring employer of the scheme where he was the Chairman of the Trustees. He and the ghost wander into the building and they see some paperwork showing that the entire scheme has been transferred to one of the new final salary scheme consolidators. The ghost looks at Trustee Scrooge and says, “You see there are still many things to be sorted out, not least of which is how authorisation and supervision of these new super consolidators will take place”. Trustee Scrooge implores the spirit to alter his fate, promising to renounce his insensitive ways and honour pensions Christmas.

Overwhelmed with the joy of the chance to redeem himself, Trustee Scrooge awakes to discover he has returned to Christmas in his own bed, he dresses and rushes to a neighbouring employer to offer his services in terms of helping the GMP equalisation with its scheme. He sends a giant Christmas turkey to the Cratchets as a bonus for all the sterling trustee secretarial work Bob has undertaken over the years, and attends the party celebrating an employer who has gone three whole years with no fines by the Regulator, as it regularly checked its auto-enrolment provision ensuring it was compliant. Finally, he returns to his former employer and asks to re-join the trustees as a member-nominated trustee with a view to making sure members get the best possible outcome (whether the scheme is staying with their employer, or going with one of the new consolidators in the future).

Happy Christmas and a great New Year to everyone. We look forward to seeing you all in 2019.


The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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