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Pre-pack trick lets bosses profit and dump pensions

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Issue 2549
Empty after the bosses finish with it
Pensions pot—empty after the bosses finish with it (Pic: Socialist Worker)

Bosses have come up with a new scam to avoid paying pensions.

Pre-pack administrations are a way of selling off company assets before going bankrupt. Companies have used the scheme’s controversial insolvency procedure to offload £3.8 billion of pension liabilities.

The Pension Protection Fund (PPF) is a “lifeboat” of last resort for the pension plans of failed companies. Roughly 148 of the 868 schemes it manages are from “pre-pack” administrations.

A further 20 schemes are currently being processed.These secretive transactions allow businesses to be sold even as they are declared insolvent.

Some 53,000 workers’ pensions are affected.

The Financial Times newspaper found that two out of three pre-pack schemes entering the PPF involved selling to existing owners or directors.

Companies include the turkey producer Bernard Matthews, the bed company Silentnight and the textile firm Bonas.


If a pension scheme enters the PPF, workers can have their pension payments capped at a significantly lower level than their promised pension.

So when the private equity firm Rutland Partners wanted to sell Bernard Matthews, it faced a £20 million deficit in the company pension fund.

By placing Bernard Matthews into a pre-pack, Rutland sold the assets of the business—the farms, land and buildings—as a going concern for £87.5 million, while shedding the pension fund.

Ranjit Boparan, the owner of the 2 Sisters Food Group bought the company assets, but none of its liabilities, including the pension scheme.

Rutland received £39 million while two creditors, Wells Fargo Capital Finance and PNC Financial Services, received £46.4 million.

So everybody wins except the recipients of the pensions.

The fund will pay out £1.3 billion of the £3.8 billion that it otherwise would.

For most a Radstock dialling code is perfectly fine. But for residents of upmarket £900,000 homes in Bath, it’s just not good enough.

People who have bought homes in a luxurious development are upset their phone numbers start with 01761—not 01225 which is the code for Bath.

Councillor June Player said for some the issue is, “they’ve spent money, they want people to know they live in Bath”.

For sale—one second hand torture plane

The Troublemaker - Spooks fight to cover up Britains role in torture
Spooks fight to cover up Britain
  Read More

Any Troublemaker readers with a spare £23 million can grab a bargain—a jet currently for sale in Dallas, Texas.

The Boeing 737 business jet seats up to 16 passengers and includes one queen and two single beds, a lounge bar, and three built-in 42-inch TV screens.

In its former career it was part of the Central Intelligence Agency’s extraordinary rendition program, transporting people around the world for torture.

In 2004 it carried the “shackled and hooded” Binyam Mohamed, who was then held in Guantanamo for five years. A few days later, the jet transported Khaled al-Masri, a Lebanese-born German citizen who was held in an American-run prison in Afghanistan for five months.

Fatima Bouchar and Abdel-Hakim Belhaj were abducted in Thailand and forced onto the aircraft.

Their rendition was organised by British spooks. The CIA rendition plane is available for viewing by appointment.

Peers are upset. The vermin in ermine aren’t getting their £300 tax-free attendance allowance for the day of the attack on Westminster.

The House was due to meet at 3pm but never convened formally so no fee is due to those locked in for six hours.

Not paying is letting the terrorists win, frankly.

Tory donors pay for a dinner with May

Theresa May has had lots of private meetings with Tory donors recently
Theresa May has had lots of private meetings with Tory donors recently (Pic: Guy Smallman)

Theresa May has so far wined and dined 49 wealthy Tory donors while prime minister.

The Conservative Party’s own figures show May has held a series of private dinners with fat cat donors.

They accounted for more than half the cash given to May during her leadership campaign.

The Leader’s Group—described as the “premier” tier of party supporters—is an exclusive club costing £50,000 a year to join.

Other high-profile members include businessman Sir Michael Hintze, one of the world’s richest men, who has donated £3,314,310 since 2001.

Property developers are also represented, including Michael Slade, who has given £645,953 in the same period.

Amjad Bseisu, chief exec of oil producer EnQuest, has given £113,986.

Rats leaving the Ukip ship

Ukip’s woes continue as high-profile members run away from the racist party. Mark Reckless, who was an AM for Ukip in the Welsh Assembly, is the latest to leave.

Last week he left to join the Tory group, saying that the vote to leave the European Union made Ukip redundant.

The defection comes after Ukip’s only MP Douglas Carswell left the party.

Former Ukip leader Diane James has now said she may run as a Tory in future elections.

James, who led Ukip for just 18 days, was an MEP for Ukip in the European Parliament before she became an independent.

Fat cat of the week

Charles Horton, chief executive of Govia Thameslink Railway (GTR)

  • Southern rail boss’s pay rose from £263,000 to £478,000 in the 12 months up to July 2016

  • Bonuses brought his annual total to £495,000

  • That makes him the highest paid director at GTR, which runs services on the Great Northern and Thameslink routes

  • The firm reported a £15.3 million profit last year

Farmers versus SAS over road

VIillagers are battling the SAS over a road closure.

Special forces and Royal Marines use the Pontrilas Training Area.

The Ministry of Defence wants to shut a three-mile road nearby, fearing it could be used by terrorists. But locals in Ewyas Harold, Herefordshire, say the closure will strand its 883 residents.

Parish council chair Peter Jinman said, “What we do not want is the term national security being bandied around to shut a road on no real basis.”

In their own words

‘We should stay the hell outta Syria’

US president Donald Trump in 2013

‘Tonight, I ordered a targeted military strike on the airfield in Syria’

Donald Trump last week

‘Whatever Assad’s sins, he is secular’

Nigel Farage is confused by Trump’s foreign policy shift

‘Croydon Unity Rally less well attended than my own funeral will be. I am off to Croydon’

Right wing columnist Katie Hopkins pinches a Socialist Worker photograph and doesn’t go to Croydon

‘Anyway, it turns out the jacket they got me to wear was worth £1,080. Yeah, see what you did there, GQ. Very funny’

Columnist Owen Jones responds to criticism of his photo shoot in GQ magazine for an interview with Alastair Campbell

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