Orders to close the company’s defined benefit pension scheme in a bid to save money call for some expert advice (in duplicate), but it all gets a bit too complicated for the powers that be, explains Candid.
I have been asked to close the old defined benefit (DB) pension plan again. My heart sinks. This is something I have successfully avoided doing for at least three years, since it was first mentioned. You see, I know how difficult it will be.
But now, with all the recession hysteria, we have to be seen to be taking all possible steps to save money. We have got a hiring freeze on but, arguably, we always have one of those. We have made another round of budget cuts, and although we do those at least three times a year, this time it is different. The hatchet is cutting deeper – much deeper.
So, the Super Beings in the US have said definitively that the old DB plan has to go. They are right, of course. Apparently, everyone else in our industry has moved to defined contribution schemes. We have, too – just not quite for everyone. The exceptions are a small group left in a special lucrative plan all of their own. Most members are from a particular location, which we bought out at some point in history and never managed to harmonise. The other members are a few canny Higher Beings who managed to convince someone (before my time) that they should be in that plan too. It is all very embarrassing, because Big Bad Boss is one of them.
The only thing to do is to set up a meeting with our pension advisers, Smarmy Consulting. My contact, Mark-no-spark, is delighted to come and, predictably, offers to bring his sidekick. I don’t know what it is about consultants, but they have to travel everywhere in pairs. Is it in case one gets lost, I wonder? You certainly never get to see one alone. Clearly, the main advantage is they get to clock up two chargeable hours instead of one. I don’t really mind, hey, it’s not my money, but I do wonder sometimes how they have the nerve. I mean, if you go to the hairdresser, they don’t suddenly spring two stylists onto you, one to dry each side of your head, thereby doubling the bill. But in the dark world of consulting, this is clearly the norm.
Mark-no-spark introduces me to his colleague, who I have not met before. The colleague, a tiny little man, is also called Mark, so I make a joke about getting two Marks for the price of one. They both look a bit sheepish. I was right about the chargeable time, then.
I want their view on the process we need to follow to make a change like this. I know there must be a consultation period, but is it 90 days, a month, or what? Smarmy can’t tell me. What is the point of meeting with two consultants if neither of them can give you the advice you want? Mini-Mark suggests we contact our employment lawyers. How helpful.
Smarmy is a big firm, so it must have lots of clients in a similar position. Oh yes it does, Mark and Mark assure me. Then at least they can tell me what other companies are doing when it comes to transition and new plan design. They will get me some data for the next meeting. At least that’s something.
I arrange a call with our legal advisers, Dullard and Longwinded. Predictably, there are two of them on the call. After 45 minutes, no doubt rounded up to a couple of chargeable hours, they get to grips with my problem and recommend I speak to their colleague, Jeremy. My annoyance must have shown, because they went on to explain: they are pensions lawyers, whereas Jeremy is the employment law expert. So why didn’t they suggest him in the first place? I think we both know the answer to that one.
Jeremy, it seems, is a very busy guy, but I manage to set up a call with him a week later, along with his colleague Elizabeth, of course. I spend another 45 minutes explaining my problem. The other two from Dullard and Longwinded clearly haven’t passed anything on, so that was a waste of time. Jeremy, unlike his colleagues, is full of advice – positively generous with it. He waffles on for a good half-hour on the ins and outs of going through a consultation process versus asking for consent, versus terminating contracts. He offers abundant explanation about notice periods, whether they are contractual or statutory, and so on. And on.
The only problem is, I can’t understand a word of it. I don’t know why, but there is something about the way he is droning on that makes me tune out. The facts aren’t quite registering with me. I thank him for his time, and ring off. What an earth am I going to do now? Then, in a flash of inspiration, I email him, asking him to summarise the points he made on the call and to draft the relevant notice. Job done.
Jeremy’s summary is actually quite comprehensible, but the notice is unreadable. It is full of legalese, so I spend an unhappy hour rewriting the letter in standard English so even our dumbest employees can understand it. Just to prove this, I ask Lazy Susan to read it. The note will also be going to a few Higher Beings, so I send it to Big Bad Boss for a further check. I wonder if he has realised he is personally affected. Maybe I should have tipped him off before. For a while, it all goes a bit quiet, but Big Bad Boss seems to be on the phone a lot.
Later, I get a call from the US to tell me there are strategic reasons why we shouldn’t make those pension changes just now. Funnily enough, I had been waiting for that.
- Next time…Candid finds a new supplier.