This week (which, you will have observed long before opening this message) ends today; Friday 18 November. As Pensions News’ (PN’s) daughters tell him, “how good does that sound”?  

If you, the reader, are feeling that this week feels significant, it is because this is the week of the annual conference of the finest body of men and women since the twelve apostles (or so PN has heard); the association of pension lawyers (APL).  This week is also the week that has seen PN fly away from cold, damp Manchester to dryer but colder Budapest; the city where the APL conference is being held this year.  In the week of the APL conference, certain friends and acquaintances of PN expressed the belief (or possibly the hope – they didn’t say which) that there would be no edition of PN on Friday 18 November.  Letting them down fairly gently, PN reminded them that there had not been an edition of PN on Friday 11 November when, by rights, there probably ought to have been. Had there been an edition of PN last Friday, it would probably have been washed away in the tide of commentary that followed the result of the 2016 Presidential election in the United States of America.

PN has no intention of limping along more than a week after the action to give his groat’s-worth of opinion about the winner of the Presidential election in the USA.  Much has been said already by both supporters and opponents of the President elect and PN does not feel he has the credentials to talk with authority about the result of an election in a democracy he knows about but does not actually know.  What PN will say, before moving on to something more directly relevant to his chosen discipline, is that at least the President elect was elected through an election in a country where elections matter.  In the USA, elections are sufficiently important for the supporters of the President elect’s defeated opponent to take to the streets in protest about a man whom, they claim, is “not [their] president”.  Such protests about presidents do not constitute precedent-setting in the USA or other liberal democracies. 

In the USA, just as in this country, an election can depose a government.  That government’s replacement, certain of having been elected (however), is not, cannot and should not be certain of being re-elected subsequently.  A number of positive things flow from this uncertainty including moderate or moderated behaviour from the elected government for fear of becoming unpopular and, possibly, having its decisions reviewed and, possibly, reversed by a successor government.  Allied to this uncertainty is the existence of a free press (which liberal democracies tend to have and which non-democracies tend not to) which tends to mean that elected governments do not behave without moderation for fear of being found out and, ultimately, replaced.

Occupational (as opposed to personal) pension schemes are required, other than where (quite rare) exceptions apply, to hold elections.  Applicable legislation obliges pension schemes with trustees (subject to the exceptions referred to earlier) to ensure that a minimum of a third of trustees are member-nominated.  Prior to the Presidential election in the USA, there were many candidates; each of whom explained to assembled media that he or she was uniquely placed to be a great president of a great country (or words to that effect).  Unbelievably (you are probably thinking as you read this), it is difficult to find any men and women prepared to act as member-nominated trustees.  This is partly because there is a substantial burden placed on such individuals including the obligation to understand the rules of their pension schemes and to understand the substance of the statutes, statutory instruments and guidance that apply to those schemes.  The key term is “conversant” meaning that the Pensions Regulator (TPR) requires trustees to be “conversant” with the rules and the laws which apply to their pension schemes.  This, understandably (in PN’s view anyway), means that a lot of individuals are less than keen on being trustees.  PN invites you, the reader, to imagine what it must be like to be required to converse about the pension scheme rules of a pension scheme – virtually any pension scheme.  Pension scheme rules can be and usually are lengthy documents; often the accumulation of years of drafting by pension professionals who are unlikely to have met.  Scheme rules have several sections which are often divided into multiple sub-sections, they have appendices, definitions which are divided and sub-divided into sub-definitions, complex cross-references and they incorporate legislation such as the sort of tax legislation which causes tax specialists to have sleepless nights.  A conversation about such a document is likely either to be mercifully short or mercilessly tedious.  There may be exceptions to this somewhat sweeping generalisation of a rule that PN has made up and it is quite possible that, after reading this article, acquaintances of PN will contact him to tell him of instances during which there was an interesting conversation about a pension scheme’s formal governing documents.  PN can tell you, his reader, that he is likely not to be awake at the conclusion of any such statement and, he thinks, you would have the same reaction.  Suffice it to state for the moment that if you, the reader, come across an individual who is the trustee of a pension scheme, congratulate him/ her, ask him/ her to keep up the good work, praise him/ her for his/ her patience, stamina and courage and change the subject.

PN was, earlier in the week, talking to a colleague about some of the pension schemes in the news.  Perhaps inevitably, the conversation turned to the British Home Stores Pension Scheme (BHSPS); a scheme which has featured in previous editions of PN.  The BHSPS has trustees of its own and they are likely to have been involved in discussions with TPR as well as Sir (for the time being at least) Phillip Green and, perhaps, the Parliamentary sub-committee headed by Mr Frank Field MP.  At the time of the conversation PN is referring to, TPR had issued a “warning notice” to Sir Phillip and others.  A “warning notice”, as the title suggests (in fact it is rare to find titles as helpful in their descriptiveness), consists of a warning to its recipients of what TPR thinks it is likely to do at a certain time (referred to in the notice) unless the recipient(s) take(s) the steps outlined in that warning notice. 

The recipients of the notice relevant to the BHSPS have, therefore, a finite period of time in which to do certain things before TPR uses its not inconsiderable powers to require those things (or a certain number of them) to be done.  In a previous edition of PN, PN stated that he felt that the story of the BHSPS and the knight who, so far, has not ridden to its rescue (and then the MP who has told anyone who will listen (and some who won’t) that the knight should ride to the scheme’s rescue) would continue to run for some time.  The BHSPS story’s protagonists have had and continue to have their own idiosyncratic ways of viewing the situation which the BHSPS is currently in.  One such protagonist (guess which one) has indicated that the situation can be “sorted”.  The other has indicated that sorting of a different sort has already occurred and that, until the scheme can be re-sorted, the first protagonist should himself be “sorted”.  PN does not subscribe to the exact views of either individual but each is entitled to have an outlook which is unlike that of his peers.  As PN has in the past quoted; some of us are different from the rest of us - and so are the rest of us.  Anyway; during the conversation with the esteemed colleague referred to, PN estimated that Sir Phillip and the TPR were possibly about one third of the way through a process which should, eventually, sort or re-sort the BHSPS problem.  This suggests that we will be well into 2017 before we see how that story will conclude.

Back to elections albeit probably not elections of member-nominated trustees; there is usually a certain amount of euphoria (some of which we have witnessed already in the USA) for the winners as they consider how they will exercise the power they have been elected to exercise.  That euphoria is temporary (otherwise, as Mr Clive James once wisely observed, it would not be euphoria) and, in a liberal democracy, the leader who takes power knows that one day, that power will have to be handed back.  Following on from the mixed emotions that have thus far come out of the BHSPS imbroglio, Sir Phillip Green may be interpreting TPR’s warning notice as a threat that the knighthood he was given by the democratically elected government of the time may need to be returned by order of a democratically elected government which is reviewing the behaviour of one of its (democratically elected) predecessors. Although certain well-known figures have criticised democracy for being the worst system of government one could possibly imagine apart from all the others (the description has been attributed to Winston Churchill but it may just have easily been said by PN’s (late) grandmother), its operation generally serves a positive purpose - in pension schemes as well as outside them.

Until next time……...