Weekly Roundup: DWP cancels Jack Bauer

This week — UK government considers doing away with ECJ’s Bauer ruling, 58 universities set to face strike action in early December, BMA threatens the government with legal action over McCloud remedy costs, and Mitchells & Butlers trustees win ‘significant’ inflation court case

Welcome to Pensions Expert’s roundup of a week that saw the government declare — kind of — its intention to do away with the European Court of Justice’s Bauer ruling.

It took nine seasons before Fox got around to cancelling Jack Bauer in 24, but the British government has become bored by his pensions law cousin in less than two years.

Next up, 58 universities across the country will see staff walk out on strike from December 1 to December 3, while “action short of a strike” will take place at 64 institutions on the same dates. 

Also this week, having already annoyed firefighters, Treasury officials are now facing the wrath of the British Medical Association over their plans to make scheme members pay the costs of the McCloud remedy.

If I were a Treasury official, I would think twice about annoying those whose job it is to save our lives in emergencies.

Finally, “one of the most significant pension rectification cases in recent years” was resolved this week as the trustees of the Mitchells & Butlers pension scheme won a battle over indexation.

Drinks on them, then.

This is the longest day of my life

The government did not quite announce its intention to do away with the European Court of Justice’s Bauer ruling, instead sending a letter to various interested parties who subsequently forwarded it on to the press.

This seems not to have been anticipated by the Department for Work and Pensions, which did not get around to commenting on the story until 9pm that day.

The Bauer ruling, handed down by the ECJ in 2019, held that lifeboats such as the Pension Protection Fund must ensure that ex-employees of insolvent companies do not fall below the poverty line when their company pension failed. The poverty line was determined by Eurostat.

As Pensions Expert reported at the time, the consensus in the industry was that the ruling would have little material impact on the PPF, which already aims to pay out benefits in full. Additionally, Eurostat’s definition of poverty was only slightly higher than the existing state pension.

Nonetheless, it caused severe headaches at the PPF, which does not collect the data required to implement the Bauer ruling — and now the DWP has administered painkillers. It plans to introduce primary legislation “when parliamentary time allows”.

School’s out – again

Given students have been suffering remote learning for some time already, it might be that they do not notice much difference when staff at 58 universities walk out on December 1.

As reported God knows how many times, the University and College Union is unhappy with the results of the Universities Superannuation Schemes’ 2020 valuation, and employers plans to cut member benefits.

Despite only attaining a 53 per cent turnout in a ballot on industrial action — and only clearing the minimum 50 per cent threshold required by law because people against the strike made the mistake of voting — UCU is pressing ahead with strike action at 58 universities.

It has previously said it will re-ballot staff at those institutions that did not clear the threshold in the hopes that staff there might likewise enjoy a longer Christmas break.

The UCU warned that the strikes have the potential to cause “significant disruption”, but Universities UK, the group representing 340 USS employers, said it will not address “the urgent need for reform” in the USS.

Damn it man, I’m a doctor

The Fire Brigades Union wrote to the government last week threatening a judicial review unless plans to impose the costs of the McCloud remedy on members are dropped, and this week the British Medical Association followed suit. Angry letters are positively piling up at the Treasury this month.

The BMA is particularly unhappy about the government’s decision to impose McCloud costs on the 2016 valuation. The government had previously promised doctors, nurses and such improved pension benefits because the 2016 valuation looked good, but the McCloud costs have put paid to all that.

Though legal experts we spoke to cast doubt on the likelihood of a judicial review successfully finding against the government, it could be that the point of these letters is to win in the court of public opinion.

We have, after all, been told for several months to shower the NHS with tributes, so it would look a bit odd — to say the least — for the government to cut its pension benefits.

Drinks on them

Finally, in case everybody had forgotten about the contention issue of indexation, the trustees of the Mitchells & Butlers pub chain won their legal battle over the right to set the default index by which pension increases are calculated.

A 1996 deed moved the authority to the sponsoring employer, rather than the trustee, and was subsequently perpetrated by two further deeds in 2002 and 2006. Prior to this, the trustee held the power to change the default index on behalf of the scheme’s 20,000 members.

However, these three deeds were found to be void because they breached scheme rules. Witnesses testified that neither they, nor the scheme’s actuaries, had been properly notified of the change.

Court judge William Trower said that although details were sometimes “imprecise”, the “more general themes” were convincing, which is usually the way conversations in pubs pan out.

People on the move

Pension platform Enplan has expanded its team with five new appointments. Fiona Cochrane joins the Enplan team as a senior manager — she has been an actuary at Isio since 2016. Jonathan Cross joins as assistant manager, having previously worked at Diligenta, and Junaid Bokhari, Sudesh Thapa and John Jamieson all join as actuarial trainees. The new appointments are all within Isio, which manages the platform’s core pension services. 

Pensions for Purpose has announced the appointment of four non-executive directors to its board. The new directors are Louise Kooy-Henckel, Heather Fleming, Debbie Fielder and John Featherby. Kooy-Henckel currently leads Wellington Management’s sustainability efforts in Emea, while Fleming is managing director of institutional business at Gresham House. Fielder is deputy head of the Clwyd Pension Fund, and Featherby is the founder of advisory company Shoremount and is also a founder of UK B Corp.

Fiona Cochrane

Fiona Cochrane

Louise Kooy-Henckel

Louise Kooy-Henckel

Heather Fleming

Heather Fleming

Debbie Fielder

Debbie Fielder

John Featherby

John Featherby