ASW Pension Scheme


I’ve been hesitating to write this particular blog, because if I’ve got my facts wrong then I’ll be slandering specific people. However, I think I’ve got enough back-up evidence to be fairly certain that the allegations are not baseless.

As I’ve written elsewhere, I was lucky that when I was made redundant at Allied Steel & Wire, I transferred all of my pension to the British Steel Pension Scheme. Otherwise, I would have been a deferred pensioner in that scheme, meaning that (1) I wouldn’t have been able to withdraw my pension until age 65; and (2) my pension would have been far less than I had reason to expect if the pension scheme had remained viable.

Anyhow, I had been speaking to Tony Franks, who used to be my boss for part of my time in AS&W and who now runs a small testing set-up in what was left of Welsh Labs. From what I gathered (and that was confirmed by later searches) Gerald Sheehan, who was one of the directors in 2001, resigned his post and joined the Royal Mint. He also took his pension, aged 52! Now you’re not going to tell me that as a director you don’t see the writing on the wall less than a year before the company collapses, so clearly this was a case of leaving the sinking ship and at the same time making sure you have your pension intact, whereas the plebs didn’t.

in support of the above, the following quotes, the first one from a parliamentary enquiry :

“Two ASW directors were allegedly paid packages valued at £2 million from the pension fund in the year prior to wind-up [note: no names are named here, but the two directors at the time were Gerald Sheehan and Bob Judd – MR]. Whatever the individual circumstances at ASW, there is widespread concern that directors with detailed inside knowledge can choose their moment to retire, while workers who continue in employment—sometimes at the behest of those very directors—may be left with only a fraction of their expected future pensions.”

The second one comes from Wales Online :

“Mr Sheehan left ASW six months before it went bust and took his pension at the age of 52. Because he was already getting his pension at the time the company crashed, he was protected from what happened to the rest of us – not to mention the fact that his was a non-contributory scheme, while ordinary workers had to pay their contributions.”

From my discussion with Tony, I also had the impression that the company had been helping itself to funds from the pension scheme to keep the company solvent. I haven’t been able to find any online evidence of this allegation, but awarding two directors 2 million pounds (each ?), as indicated above may come pretty close to dipping your hand into the pension pot. Not quite a Robert Maxwell trick, but something doesn’t feel quite right. Also, just as Corus did during part of its existence, it appears that AS&W gave itself a pension holiday, claiming that the pension scheme was overfunded anyway. Another parliamentary publication bears this out :

“Pension funds considered able to finance full pensions were deemed to be overfunded. That led many companies to introduce pensions holidays during the 1990s. That included ASW, whose pension scheme was very healthy, standing at about 130% of the MFR. To avoid taxation, the company introduced a pensions holiday for several years, during which it made no contributions to its pension fund. It eventually reduced the scheme to just over 100% of the MFR.”

Meaning that the fund had enough to pay existing pensioners, but not deferred and contributing members if the company went bust and no further moneys came into the scheme from the existing contributors. In the end Gerald Sheehan became the deputy master of the Royal Mint, and in 2005 its director. Less than a year later, he resigned “to pursue other interests”, but even then received a handsome severance payment of £275,000. Isn’t it handy to have your hand on the purse strings ?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s