A dras­tic so­lu­tion to a pen­sions cri­sis

The Week Middle East - - City -

Jeremy Warner

The Daily Tele­graph At the last count, the com­bined deficit of Bri­tain’s 5,945 pri­vate­sec­tor salary pen­sion schemes was a “jaw-drop­ping” £419.7bn – or nearly a quar­ter of Bri­tain’s an­nual GDP, says Jeremy Warner. “Five out of six of Bri­tain’s de­fined ben­e­fit pen­sion funds are deep in the red.” Pen­sions have been “rit­u­ally abused with ex­tended con­tri­bu­tion hol­i­days” and “re­peated Govern­ment raids”; stock­mar­ket melt­down in the Noughties saw deficits bal­loon and “the cur­rent ul­tra-low in­ter­est-rate en­vi­ron­ment has ren­dered fur­ther re­pair all but im­pos­si­ble”. Pro­posed so­lu­tions – such as forc­ing com­pa­nies to in­crease their con­tri­bu­tions – aren’t enough to fix an “es­sen­tially bro­ken sys­tem”. We need a far more rad­i­cal ap­proach: “a once and for­ever cap to the li­a­bil­ity” en­gi­neered, say, through “a one-off cor­po­rate con­tri­bu­tion of half the present deficit”. As the in­vest­ment risk would be trans­ferred to a fund’s mem­bers, it wouldn’t be “an easy sell”. But it would at least rep­re­sent “a firm set­tle­ment”, putting an end to the scan­dals and the now al­most “patho­log­i­cal prob­lem of pen­sions dump­ing”. John Lewis’s new man­ag­ing di­rec­tor is not only the first wo­man to lead the group in its 152-year his­tory but also “the only fe­male leader of a UK depart­ment store chain”, says the Daily Mir­ror. Hav­ing joined as a grad­u­ate trainee in 1994, work­ing in hab­er­dash­ery, Nick­olds is a John Lewis lifer, steeped in the part­ner­ship’s es­o­teric ways. On that score, there’s no de­par­ture from tra­di­tion: all pre­vi­ous John Lewis man­ag­ing direc­tors have been ap­pointed from within. Pre­vi­ously the group’s com­mer­cial di­rec­tor, re­spon­si­ble for “in­no­va­tion” in the prod­uct range and the “look and feel” of stores, she re­places Andy Street, who is run­ning as the Tory can­di­date for the mayor of the West Mid­lands.

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