Bonuses clampdown benefits pension schemes

The clampdown on bankersí bonuses could be good news for pension schemes. Gary Tansley, Consultant at HamishWilson, explained: ìThe Pensions Regulatorís recent statement to employers sponsoring DB pension schemes indicated that he does not expect to see recovery plans compromised to enable the payment of dividends to shareholders. In addition to questioning employers about their dividend policies, we believe trustees should be asking employers about their plans for paying discretionary bonuses.î

Tansley added: ìIt is paradoxical that the payment of dividends, which to a large extent end up in other pension schemesí coffers, can be subject to the Regulatorís Clearance procedures whereas employers have a free hand to pay bonuses to members of staff. Both result in cash being paid out of the business to the potential detriment of the employerís covenant and the security it affords to the pension scheme and membersí benefits.î

ìWhat is bad news for bankers may turn out to be good news for the banksí pension schemes and their members. Other schemes will benefit too if the clampdown crosses over into other industry sectors.î