Lords debate Wedgwood case
Calls for change to “last man standing” legislation
Howard Flight, addressing the House of Lords last week, asked the government whether, in light of the Wedgwood case, it intended to legislate to prevent the “last man standing” rule applying to the assets of charitable museums.
The "last man standing" rule applies where an organisation in a multi-employer pension scheme is liable for the pension deficits of organisations in the scheme that go into administration.
Responding for the government, Patricia Rawlings said: “The government has reviewed this case carefully and believes that it would be inappropriate not to apply this rule to charities. Charities should have the freedom to choose pension schemes that suit their needs.”
Commenting on the debate in an exclusive article for the Museums Association website, David Davison, the head of the charity and not-for-profit practice at actuaries Spence & Partners Limited, agreed that exempting charities from the rule was not the best solution.
But, he said: “In my view it is hard to envisage circumstances where the participation of a charity in a defined benefit pension arrangement does not represent an untenable and unacceptable risk.”
And, Davison added, further consultation into section 75 of the Pensions Act 1995, which contains the “last man standing” rule, is needed. Wedgwood, he warned, is just the tip of the iceberg.
The Department of Work and Pensions (DWP) carried out an initial consultation on section 75 and the “last man standing" rule last year, and a DWP spokeswoman said there were no plans for another review, but added that the department would "continue to involve stakeholders in this issue".
The Wedgwood Museum is awaiting a judgement by the attorney general following a high court decision last year that its collections were not protected from a £134m pensions liability incurred when Waterford Wedgwood, another company with employers in the same pensions scheme as the museum, went into liquidation.
Last week saw the Royal Academy lend its support to the campaign to save the Wedgwood collection, with artist Tracey Emin and 16 other Academicians writing to the Guardian, saying: “This collection is unique in the story it has to tell of the combination of art and industry, of fine artists working within a successful industry… and with a lasting worldwide influence.”
Links and downloads
David Davison: Wedgwood case is just the tip of the iceberg
House of Lords debate into Wedgwood Museum (external website)
The "last man standing" rule applies where an organisation in a multi-employer pension scheme is liable for the pension deficits of organisations in the scheme that go into administration.
Responding for the government, Patricia Rawlings said: “The government has reviewed this case carefully and believes that it would be inappropriate not to apply this rule to charities. Charities should have the freedom to choose pension schemes that suit their needs.”
Commenting on the debate in an exclusive article for the Museums Association website, David Davison, the head of the charity and not-for-profit practice at actuaries Spence & Partners Limited, agreed that exempting charities from the rule was not the best solution.
But, he said: “In my view it is hard to envisage circumstances where the participation of a charity in a defined benefit pension arrangement does not represent an untenable and unacceptable risk.”
And, Davison added, further consultation into section 75 of the Pensions Act 1995, which contains the “last man standing” rule, is needed. Wedgwood, he warned, is just the tip of the iceberg.
The Department of Work and Pensions (DWP) carried out an initial consultation on section 75 and the “last man standing" rule last year, and a DWP spokeswoman said there were no plans for another review, but added that the department would "continue to involve stakeholders in this issue".
The Wedgwood Museum is awaiting a judgement by the attorney general following a high court decision last year that its collections were not protected from a £134m pensions liability incurred when Waterford Wedgwood, another company with employers in the same pensions scheme as the museum, went into liquidation.
Last week saw the Royal Academy lend its support to the campaign to save the Wedgwood collection, with artist Tracey Emin and 16 other Academicians writing to the Guardian, saying: “This collection is unique in the story it has to tell of the combination of art and industry, of fine artists working within a successful industry… and with a lasting worldwide influence.”
Links and downloads
David Davison: Wedgwood case is just the tip of the iceberg
House of Lords debate into Wedgwood Museum (external website)