Talk Morgan Forums Community The Malvern Arms Norton Pension Fund.

I've just been reading this article in the Guardian about the Norton pension fund fraud, which inspired me to surf around a bit reading up more on this appalling story.

https://www.theguardian.com/busines...ered-to-pay-back-missing-14m-in-pensions

Could someone who works in the pensions sector please explain to me how this was allowed to happen ?

Greed.
Disingenuous behavior some would call dishonesty...

as an ex pension trustee we were taught that since Maxwell a pension fund couldn't invest in it's "parent company". Though it does say some of the members didn't work for Norton.
He also seems to have been the sole trustee. Where were that auditors in all this?

AIUI, most of the savers in the 3 funds were not, nor had ever been Norton employees. In 2012 and 2013 over 228 savers were duped into transferring over £14m of their pension funds into 3 Norton owned Pension Schemes. The funds in the Norton pension schemes were invested solely into Norton Motorcycle shares. The trustee of the pension schemes, Stuart Garner, was also the owner of Norton Motorcycles.

When Maxwell raided the Daily Mirror fund there was outcry and supposedly measures to protect funds put in place. Clearly still loopholes still there.
When I worked for Gallaher Tobacco we had a great non contributory pension fund. Due to it’s fund growing in excess of liabilities the company took pension holidays to reduce the excess. When a crash caused the fund to lose value a plan was agreed to reinvest over a given period to get the fund back in shape. A few £billion if I remember correctly. That was done and the fund is doing what it should. The decision to take the holiday from payments was managed via the Trustees. It was decided not to use the excess money to increase benefits as that could put stress into the scheme if a future downturn reduced the fund making it unable to maintain pension payments. That actually happened so the losses were mitigated but still big. The company didn’t in effect take money from the fund but just stopped paying in to reduce the excess. A saving for them but it came back as needing replacement after a crash. This process was typical of company ethos of employee benefits and also showed itself in profit share and sharesave schemes that employees could use.
A good company to work for.

Having visited the Norton Factory twice, I would struggle to see where £14m could be invested. It was an assembly operation in a large room (used to be the British Midland call centre).

This really does have a nasty smell about it.

Sadly Blair & Brown destroyed final salary schemes for normal workers (MPs were naturally exempt). They did they taxing the diviends funds got on investments so the returns fell. They then insisted companies showed any deficit on the fund as part of their balance sheet. This negatively affected companies values.
The companies moved to the less risk defined contribution scheme where we take the risk and nothing is on the balance sheet.

I never forgave either of them for that theft.

The only downside of final salary schemes is that they discouraged staff from leaving, which the employers liked.
Defined Contribution schemes encourage employee mobility, which may, or may no, be a bad thing.

Caroline and I have 2 small final salary pensions and 3 state pensions, UK and for me, a German one. Together we could survive on these. My SIPP is the top up and allows us to run a Morgan and not worry too much.

The EDS final salary scheme was the only thing that kept me hanging on through the later HP days. When HP hived off a large part of the old EDS (what was left after HP's decimation) to form DXC Technology by amalgamation with a third IT outfit, within a year the final salary scheme was frozen and a new scheme started. Fortunately, I was made redundant a month later.

also civil servants