Sir Philip Green vs Select committee

[Wills2]

I very much doubt that at the point of sale, £1 was handed to seller and £200 million flew into the BHS current account.

IIRC from the select committee hearings there were facilities arranged which offered some level of funding but often with many strings attached like paying back the first tranche before receiving the second etc...

[Welshbeef]

https://www.theguardian.com/business/2015/mar/12/s...

According to this at the time of the sale the pension deficit was £100m - so the question clearly is regardless of the business going down the drain how in 1 year did that deficit grow to nearly £600m.

Also in reality the investment decisions post sale had nothing to do or any influence from Green so worst case he is in it for £100m.



Oh and he now has 3 super boats not 2 .

[sidicks]

Welshbeef said:

https://www.theguardian.com/business/2015/mar/12/s...
According to this at the time of the sale the pension deficit was £100m - so the question clearly is regardless of the business going down the drain how in 1 year did that deficit grow to nearly £600m.

Also in reality the investment decisions post sale had nothing to do or any influence from Green so worst case he is in it for £100m.

Oh and he now has 3 super boats not 2 .

It didn't!

Read previous posts in the thread that explained the difference between a scheme deficit (on a funding basis) (was £100m, now £230m+?) and a deficit on a buy-out basis (now £600m)!

[Welshbeef]

sidicks said:

Welshbeef said:

https://www.theguardian.com/business/2015/mar/12/s...
According to this at the time of the sale the pension deficit was £100m - so the question clearly is regardless of the business going down the drain how in 1 year did that deficit grow to nearly £600m.

Also in reality the investment decisions post sale had nothing to do or any influence from Green so worst case he is in it for £100m.

Oh and he now has 3 super boats not 2 .

It didn't!

Read previous posts in the thread that explained the difference between a scheme deficit (on a funding basis) (was £100m, now £230m+?) and a deficit on a buy-out basis (now £600m)!

Yes but because the PPF is now involved as company bust there is no facility to part fund its full buyout or zilch and an instant 10% cut in pensions to all current and future pensioners.

[sidicks]

Welshbeef said:

Yes but because the PPF is now involved as company bust there is no facility to part fund its full buyout or zilch and an instant 10% cut in pensions to all current and future pensioners.

You asked what the difference between the two figures was - I explained it!

[Welshbeef]

sidicks said:

Welshbeef said:

Yes but because the PPF is now involved as company bust there is no facility to part fund its full buyout or zilch and an instant 10% cut in pensions to all current and future pensioners.

You asked what the difference between the two figures was - I explained it!

But why should a past owner who at the time was only on the hook for £100m then the new owner screws the company changed the fund investment strategy and China tanks and he EU Brexit meaning that as the company has define bust he is then on the hook for £600m?


Let him pay £100m that's all

[sidicks]

Welshbeef said:

But why should a past owner who at the time was only on the hook for £100m then the new owner screws the company changed the fund investment strategy and China tanks and he EU Brexit meaning that as the company has define bust he is then on the hook for £600m?


Let him pay £100m that's all

As explained before, (unless there is something dodgy behind the scenes), he isn't liable for the £100m deficit when he sold the business either - that liability went to the new owner and the price paid for the business should have reflected that!

[Welshbeef]

sidicks said:

As explained before, (unless there is something dodgy behind the scenes), he isn't liable for the £100m deficit when he sold the business either - that liability went to the new owner and the price paid for the business should have reflected that!

But he has stated in the parliamentary questioning of him that he would make it right

Now why would he do that? Either innocent or guilty it's black or white any hint of guilt will harm his prevailing business as people boycott them

[sidicks]

Welshbeef said:

But he has stated in the parliamentary questioning of him that he would make it right

Now why would he do that? Either innocent or guilty it's black or white any hint of guilt will harm his prevailing business as people boycott them

We do't have information to judge that!

[Whoozit]

sidicks said:

Well Whoozit (above) appears to think he knows better...

Wind your neck in. I said it was a personal opinion, which I'm entitled to have. I watched Green's entire Select Committee testimony, and followed the reporting on the rest with interest. So not entirely uninformed. Could the lot of them be lying through their teeth? Sure. So are the politicians on the committees when it comes to nearly every topic of Party, political or national interest. But it's what I have to go on and I don't have any interest in conspiracy theories. I've been around long enough to know most monumental fkups are due to ignorance or laziness.

And no, I am not in the sponsored pension fund industry. But I would ask, if as you say longevity/NPV (and not simple interest rate hedges thankyouverymuch) hedges are easily and cheaply available, why are these DB schemes running into trouble? That didn't seem to be a major topic of discussion in Parliament. I am genuinely interested, if you really want to educate I'm all ears.

[sidicks]

Whoozit said:

Wind your neck in. I said it was a personal opinion, which I'm entitled to have. I watched Green's entire Select Committee testimony, and followed the reporting on the rest with interest. So not entirely uninformed. Could the lot of them be lying through their teeth? Sure.

Did the select testimony go through the minutes of the Trustee board meetings etc, to show who said what etc?

Whoozit said:

So are the politicians on the committees when it comes to nearly every topic of Party, political or national interest. But it's what I have to go on and I don't have any interest in conspiracy theories. I've been around long enough to know most monumental fkups are due to ignorance or laziness.

As far as I'm concerned, often the Treasury Select committee (and Frank Field in particular, are just a bunch of grandstanding idiots, but I'm sure that there's plenty of information that they've seen that we have not.

Whoozit said:

And no, I am not in the sponsored pension fund industry. But I would ask, if as you say longevity/NPV (and not simple interest rate hedges thankyouverymuch) hedges are easily and cheaply available, why are these DB schemes running into trouble? That didn't seem to be a major topic of discussion in Parliament. I am genuinely interested, if you really want to educate I'm all ears.

So you've changed your tune somewhat?! You now appear to recognise that it is easy, straightforward and relatively inexpensive to hedge interest rate and inflation risk for a pension scheme, which captures the vast majority of market risk. Such a cautious approach would have protected the scheme in the last 5+ years.

In comparison to interest rates and inflation, longevity risk is second order, and evolves over long time horizons not short ones. Longevity risk and the implications on DB schemes has crept up over 10-20 years rather than changed massively recently - this was certainly NOT the main reason for the deficit in the BHS scheme.

Longevity hedges clearly include some margins against idiosyncratic risk and trend risk, hence there is a cost beyond the expected value of liabilities. Again, a cautious strategy would seek to hedge this too, or at least the more stable pensioner liabilities within the scheme.

http://www.uk.mercer.com/newsroom/mercer-zurich-la...

https://www.towerswatson.com/en-GB/Insights/Newsle...

http://www.professionalpensions.com/professional-p...

https://www.corporate-adviser.com/issues/july-2016...

Etc etc etc

By not hedging these key components, DB schemes are actively choosing to take risks with the aim of reducing the overall cost of providing benefits. When those risks don't work out, they only have themselves to blame and are entirely responsible for the deficits caused.

Edited by sidicks on Friday 29th July 06:10

[Whoozit]

sidicks said:

So you've changed your tune somewhat?! You now appear to recognise that it is easy, straightforward and relatively inexpensive to hedge interest rate and inflation risk for a pension scheme, which captures the vast majority of market risk. Such a cautious approach would have protected the scheme in the last 5+ years.

In comparison to interest rates and inflation, longevity risk is second order, and evolves over long time horizons not short ones. Longevity risk and the implications on DB schemes has crept up over 10-20 years rather than changed massively recently - this was certainly NOT the main reason for the deficit in the BHS scheme.

Longevity hedges clearly include some margins against idiosyncratic risk and trend risk, hence there is a cost beyond the expected value of liabilities. Again, a cautious strategy would seek to hedge this too, or at least the more stable pensioner liabilities within the scheme.

http://www.uk.mercer.com/newsroom/mercer-zurich-la...

https://www.towerswatson.com/en-GB/Insights/Newsle...

http://www.professionalpensions.com/professional-p...

https://www.corporate-adviser.com/issues/july-2016...

Etc etc etc

By not hedging these key components, DB schemes are actively choosing to take risks with the aim of reducing the overall cost of providing benefits. When those risks don't work out, they only have themselves to blame and are entirely responsible for the deficits caused.

Edited by sidicks on Friday 29th July 06:10

You're misinterpreting what I said. And being unpleasant in tone whilst almost completely unhelpful to understanding the precise issues at hand.

On my personal ignore list. Goodbye.

[sidicks]

Whoozit said:

You're misinterpreting what I said. And being unpleasant in tone whilst almost completely unhelpful to understanding the precise issues at hand.

You (twice) made quite explicit comments about the risk management of a DB pension scheme which were categorically, fundamentally and demonstrably wrong.

I've demonstrated that.

I've tried to explain exactly what could have been done to manage the DB scheme and hence help to 'understand the precise issue at hand'. Given the above, your conclusions about who can be blamed for the emergence of the deficit in the scheme is fundamentally flawed.

Whoozit said:

On my personal ignore list. Goodbye.

No problem - suggest you stick to topics you actually understand in future!
Goodbye!

Edited by sidicks on Friday 29th July 14:31

[avinalarf]

Oh this is fun....sidicks.....whoozit......pay attention......give a wave.....Sir Philip is floating by on his yacht.
By the way sidicks....got a bone to pick with you.....I took the trouble to reply to a comment of yours on a post of mine and you haven't come back to me.....wake up man.

[Wills2]

He always spoils threads with his one-upmanship style of bickering, seems incapable of putting his views forward without trying to belittle other posters, it's a bit of a shame TBH for a grown man to act in this way.

[sidicks]

Wills2 said:

He always spoils threads with his one-upmanship style of bickering, seems incapable of putting his views forward without trying to belittle other posters, it's a bit of a shame TBH for a grown man to act in this way.

Thanks for your input.


If someone wants a sensible discussion then I'll respond accordingly. If someone is going to repeatedly contradict known facts about something which they clearly don't understand, then as far as I'm concerned, they deserve what they get!

Edited by sidicks on Friday 29th July 16:30

[greygoose]

Wills2 said:

He always spoils threads with his one-upmanship style of bickering, seems incapable of putting his views forward without trying to belittle other posters, it's a bit of a shame TBH for a grown man to act in this way.

Condescension seems to be his default style sadly, could explain why he posts on here rather than talking to friends at work!

[sidicks]

greygoose said:

Condescension seems to be his default style sadly, could explain why he posts on here rather than talking to friends at work!

Only when someone repeatedly claims things known to be false, spoiling the thread.

[crankedup]

greygoose said:

Wills2 said:

He always spoils threads with his one-upmanship style of bickering, seems incapable of putting his views forward without trying to belittle other posters, it's a bit of a shame TBH for a grown man to act in this way.

Condescension seems to be his default style sadly, could explain why he posts on here rather than talking to friends at work!

Be fair, Sidkicks knows what he is talking about when it comes to pension fund stuff, and he loves pointing out others lack of this knowledge when they post (and me included). It's a boring and tedious job which is likely why Sidkicks spends so much time in here pontificating and righting our wrongs.

[sidicks]

crankedup said:

Be fair, Sidkicks knows what he is talking about when it comes to pension fund stuff, and he loves pointing out others lack of this knowledge when they post (and me included)

crankedup said:

. It's a boring and tedious job which is likely why Sidkicks spends so much time in here pontificating and righting our wrongs.