Would You Want Your Pension Fund Managed From Guernsey

There’s wide coverage this morning of the purchase of Telent (the last rump of the old GE / Marconi empire) to the Guernsey based Pension Corporation. As the Times reports it:

Telent agreed to a £400 million takeover by a subsidiary of Pension Corporation, a Guernsey-based retirement fund consolidator that is run by the private equity figure Edmund Truell. Pension Corporation is keen to add the £2.5 billion Telent pension fund to the pension liabilities that it bought from companies including Threshers, the wine retailer, and Thorn, the electrical company.

As they also say:

In a letter sent yesterday to the scheme’s 60,000 members, Chris Holden, chairman of the Telent pension trustees, said that he had been unaware of the impending transaction. “The Trustee has not been privy to the offer and is unaware of . . . Pension Corporation’s plans for the pension scheme,” he wrote.
Mr Holden said that he would seek a meeting with Pension Corporation to hear how it planned to fund the scheme and that he would “discuss their proposals with the Pensions Regulator”.

I’m not surprised he’s shocked. There is no doubt that Telent (which supplies IT support services) will not remain in the ownership of the Pension Corporation for long. They really want the £2.5 billion of assets in the old Marconi pension fund.
There is a clear case here for the Pension Regulator to intervene to protect UK pensioners. Allowing this fund to move to Guernsey would be unacceptable because:
a) It would move out of UK regulation
b) Guernsey might have some of the bits of paper in place to regulate financial services but it does not have the capacity to actually do so. A place that small simply can’t provide an effective regulatory service
c) Guernsey is, like all havens, dedicated to secrecy and that’s the last thing needed in pension management
d) Accountability for this money will be lost
e) The burden of support for those who might lose out as a result is bound to pass to the UK government.

Offshore management of such arrangements exploits the structure of such funds as if they were private property. They are not. They were created for a communal benefit. The exploitation is therefore at the expense of society. In this case those exploited will be in retirement and therefore relatively vulnerable.

It’s another example of the parasitical nature of the activity undertaken in places like Guernsey. As such hope it is stopped.





Richard Murphy on tax and corporate accountability