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SarahBell

Primark Pensions Woes

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http://metro.co.uk/2016/09/12/brexit-has-really-done-a-number-on-primark-6122914/?ito=facebook

Primark has seen its pension fund plunge from a surplus into a £200 million deficit, all thanks to Brexit.

A full-year of sales have also been dramatically hit by bad weather, said the retailer.

Primark’s pension scheme took a dive after the Bank of England lowered its benchmark interest rate to 0.25% – it’s lowest ever.


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http://metro.co.uk/2016/09/12/brexit-has-really-done-a-number-on-primark-6122914/?ito=facebook

Primark has seen its pension fund plunge from a surplus into a £200 million deficit, all thanks to Brexit.

A full-year of sales have also been dramatically hit by bad weather, said the retailer.

Primark’s pension scheme took a dive after the Bank of England lowered its benchmark interest rate to 0.25% – it’s lowest ever.

Hardly surprising if you understand the impact interest rates have on pension returns....

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Just posted this in BOE thread

Posted Today, 01:48 PM

Bank of England attacked over 50% pension contributions

Quote

The former Conservative pensions minister, Ros Altmann, has launched an extraordinary attack on the Bank of England for making pensions ruinously expensive for employers while enjoying lavish subsidies from the taxpayer for its own pension scheme.

It has emerged that employees, led by the Bank’s governor, Mark Carney, received the equivalent of a 50%-plus salary contribution into their pensions last year, underwritten by the taxpayer. Most private employers pay 5-10% of salary into pensions, with many large companies struggling to cope with widening deficits in their schemes.

Lady Altmann, who was pensions minister under David Cameron, blamed the Bank’s quantitative easing programme (QE) for creating ever-larger deficits, while itself being insulated from the problems caused by its policies.

3982.jpg?w=300&q=55&auto=format&usm=12&f Ros Altmann.

“The private sector cannot just keep on putting more and more money into the seemingly bottomless pension pit,” said Altmann, accusing the Bank of complacency. “The Bank has been insulated from the problems caused by QE because its own pension scheme is funded by taxpayers.” QE, where the Bank of England creates money to buy government bonds, has the effect of pushing down the interest rate, or yield on government bonds. It means lower mortgage rates, and lower interest rates on bank deposits. But it also spells hardship for final-salary-based pension funds, as lower interest rates mean investments will not grow as much to meet the bill for paying future pensioners. So employers have to pay more in now to fill the gap.


Edited by Fairyland

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Was it suggested that the BoE have been doing insider dealing with their pension fund investments?

...the Bank of England should not be running it's own pension fund ...hardly Chinese walls for investment strategy....this needs government intervention ..the institution is neo-public sector and pensions are all funded by the tax payer ...let the tax payer have some control over this.....as for the 0.25% reduction in base rate ...this should never have been made..export orders were already flying due to the exchange adjustment ...it was not needed and Carney has not provided a logical reason for such a manoeuvre. Primark can hardly blame that move alone...and have it linked to BREXIT! ..a foul call...there was a risk both ways in the vote for BREXIT and that has to factor into pension investment planning.... :rolleyes:

Edited by South Lorne

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Pretty disgraceful that the headline says it is due to Brexit.

The truth is pensions were in big trouble before the referendum due to low interest rates and QE. Then they reduced interest rates still further when there was no need to do so.

Primark sales UP 9% !?

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Pretty disgraceful that the headline says it is due to Brexit.

The truth is pensions were in big trouble before the referendum due to low interest rates and QE. Then they reduced interest rates still further when there was no need to do so.

Primark sales UP 9% !?

But brexit was the cause of the rate cut.

Oh, but didn't Carney say rates would rise if we brexit. Lol

Carney used the cut as a punishment, simplenas, I told you so, brexit will kill the economy, not my interest rate QE bs manipulation, like bankster scumbag he is.

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Surplus to £200mn deficit in a year. Presumably this is due to the change in the discount rate to calculate liabilities? It does seem to be as a result of the BOE recent actions ballooning deficits in atleast some of the defined benefit schemes. I can't find that recent pension thread! I wonder whether actuaries will order increased contributions?

Aside from the pension deficit in the Primark business sales went year on year negative. I think this was in a period of falling prices! The BBC analysis points to weather meaning people hang onto clothes. This is Primark though - their clothes don't last!

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Does Primark have a separate pension fund from its owner ABF (of which it is a big part)?

It's not listed in any of the lists I've seen of companies weighed down by disproportionate pension liabilities.

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Does Primark have a separate pension fund from its owner ABF (of which it is a big part)?

It's not listed in any of the lists I've seen of companies weighed down by disproportionate pension liabilities.

Don't think so, its the usual mischievious click-bait journalism as none of the plebs would know who Associated British Foods are.

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