BHS Filing for administration
- Thread starter eldergeek
- Start date
A store that sells reasonable quality stuff at good prices? Where's the problem?
I imagine it would have been a combination of lower assumed growth on the assets as well as increasing longevity of the members. I can't recall precise details, but I'm fairly sure the pension trustees wrote to BHS a number of times to warn of the ballooning deficit. It doesn't matter what reason there is for the deficit - the employer has the responsibility to deal with it as guided by the trustees. I assume there's so much criticism of Green & co because they probably refused to adjust the funding of the scheme and just let the deficit continue to increase.
Quite why a business of this nature has a defined benefit scheme still is beyond me. The size of the liabilities means that, in essence, they're not a retailer - they're a pension fund that does a bit of retail to help fund the pension scheme.
Translation: Green raided the company - including the pension fund - for personal gain on the basis that a booming stock market would make up for it. The stock market stopped booming and the fund was ****ed. The whole point of pension funds is the long term. Even the Bible understands lean year and fat years.
No one rushing out like they did at Port Talbot yet the effect is just as damaging.
hardly, if Port Talbot closed because there were other UK based steel plants that were more efficient, innovative, better run etc.. then maybe it would be similar and not really an issue
the steel issue is partly about the loss of an industry to overseas competition, BHS is a company failing to other competition within its sector - the UK retail sector still very much exists
then again had they done that then maybe the company would have collapsed sooner... albeit without the pension shortfall
he can't raid the pension fund, the pension fund was fine at the time he took his dividends... on the other hand whether taking that cash out of the company gave management less leeway to improve it is another matter
but yes, clearly it doesn't look good at all - he's taken 400 million out of a company he owned which he later had to sell for £1 to a businessman with a dubious past history and which has then gone on to collapse
Spot on
I'm sure I used the expression "long term"? As in: longer than the current financial year? The main reason so many final salary pensions got into trouble was not demographics (although would have struck eventually) but bad management. Every time the fund looked a bit flush the company took payment holiday so that they could divert the money elsewhere, like the owner's or shareholders' pockets. Again: lean years and fat years. This looks to have been pretty much the same: **** the workers as long as the boss gets rich.
Funding is part of the problem but not all of. You may have forgotten the impact of £375 billion of quantative easing on defined benefit pension funds.
It was your statement that 'Green raided the company - including the pension fund' that I was commenting on, he didn't and couldn't raid the pension fund. Whether it was underfunded later or simply took a hit in the financial crisis is another matter but also not directly related to his dividends which were taken at a time when the fund was fine.
Your logic and reason has no place here.
Apparently there is a masonic cabal of Tory Scum™, big business fat cats with crystal balls, able to see into the future. They hatch elaborate scams, this one so intricate that Philip Green bided his time for 15 years, and when the time was right, raided Britain's beloved BHS Pension fund, just so he could make a 'quick buck'.
Soldato
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Asset Stripping at its finest. Been going on for decades, will be happening for decades more.