This comes amid concerns over Centrica force-fitting prepayment meters in homes and as households struggle to pay energy bills. Centrica defended the bonus, saying that it needed to pay bonuses to retain leaders and attract future talent. The company’s board also emphasised that it hired senior executives on employment contracts that have a significant proportion of pay which is performance-related.
The Bank of England is set to release tougher rules for liability-driven investment (LDI) funds next week. These funds, used by pension schemes to match assets with payouts, were adversely affected by the crash in UK government bond prices, with some smaller and pooled schemes struggling to meet collateral calls. The Bank of England had to intervene to help bond prices recover. UK government ministers have stated that the new rules must maintain a balance between improving resilience and allowing the funds to remain useful. The rules will cover the size of cash buffers, data reporting, and governance. Some lawmakers have questioned whether pension schemes should be using LDI funds, but pensions minister Laura Trott believes they still have a useful place in overall investment options.
