BROADSTONE warns of potential UK Detroit style pension scheme catastrophe
Tel: 020 7893 3456 Fax: 020 7487 3686 www.broadstoneltd.co.uk
55 Baker Street London W1U 7EU
PRESS RELEASE 25 July 2013
BROADSTONE warns of potential UK Detroit-style pension scheme catastrophe. The bankruptcy of the US city of Detroit has exposed a very significant deficit in its municipal pension scheme. Consultants at Broadstone believe that it is quite possible that something similar could happen in the UK. John Broome Saunders, an actuary at Broadstone, commented: “UK local government pension liabilities are around £200 billion, spread across around 100 different regional schemes. Pretty much every single scheme is in deficit, most schemes have adopted higher-risk investment strategies, and none of these schemes is protected by the Pension Protection Fund.” Broome Saunders believes that this potentially toxic set of circumstances has not properly been addressed: “Received wisdom in the UK is that local authorities don’t go bust – and therefore it follows that robust funding of their pension obligations doesn’t really matter. Events in Detroit provide a cautionary tale highlighting the naivety of such an attitude. UK central government has made clear efforts to improve the security of private sector pension schemes over the last few years – perhaps it should now turn its attention to local government schemes, before a Detroit-style insolvency leaves an entire region with tens of thousands of impoverished pensioners.” Ends For press information contact: Oliver Parry, Redleaf Polhill
020 7382 4762 / [email protected]
Jenette Greenwood, Redleaf Polhill
020 7382 4761 / [email protected]
Notes to editors:
All references to Broadstone Corporate Benefits Ltd must be made in full.
For more information go to: http://www.broadstoneltd.co.uk
Broadstone Pensions & Investments Ltd is authorised and regulated by the Financial Services Authority. Registered in England and Wales under No. 02096406. Registered office 55 Baker Street, London W1U 7EU.
55 Baker Street London W1U 7EU
PRESS RELEASE 25 July 2013
BROADSTONE warns of potential UK Detroit-style pension scheme catastrophe. The bankruptcy of the US city of Detroit has exposed a very significant deficit in its municipal pension scheme. Consultants at Broadstone believe that it is quite possible that something similar could happen in the UK. John Broome Saunders, an actuary at Broadstone, commented: “UK local government pension liabilities are around £200 billion, spread across around 100 different regional schemes. Pretty much every single scheme is in deficit, most schemes have adopted higher-risk investment strategies, and none of these schemes is protected by the Pension Protection Fund.” Broome Saunders believes that this potentially toxic set of circumstances has not properly been addressed: “Received wisdom in the UK is that local authorities don’t go bust – and therefore it follows that robust funding of their pension obligations doesn’t really matter. Events in Detroit provide a cautionary tale highlighting the naivety of such an attitude. UK central government has made clear efforts to improve the security of private sector pension schemes over the last few years – perhaps it should now turn its attention to local government schemes, before a Detroit-style insolvency leaves an entire region with tens of thousands of impoverished pensioners.” Ends For press information contact: Oliver Parry, Redleaf Polhill
020 7382 4762 / [email protected]
Jenette Greenwood, Redleaf Polhill
020 7382 4761 / [email protected]
Notes to editors:
All references to Broadstone Corporate Benefits Ltd must be made in full.
For more information go to: http://www.broadstoneltd.co.uk
Broadstone Pensions & Investments Ltd is authorised and regulated by the Financial Services Authority. Registered in England and Wales under No. 02096406. Registered office 55 Baker Street, London W1U 7EU.
