UK - Trustees have welcomed deputy prime minister John Prescott's intervention over pension benefits for members of a scheme in wind-up.
Capital Cranfield – the independent trustee of the £4m Shipham & Company Retirement Benefits Plan – agreed a “Bradstock-type” deal to settle a £1.8m shortfall in the final salary scheme.
The compromise – settled via the courts in July 2003 – will see three staggered payments from the employer, concluding in July, amounting to £350,000.
But Prescott – who represents the Hull constituency where the firm is based – told members of the Shipham Pension Action Group he would arrange for them to meet pensions minister Malcolm Wicks to discuss the possibility of retrospective compensation.
Capital Cranfield’s Charles Goddard said: “I, like many other trustees, would be delighted to hear of a policy commitment by Mr Prescott to fund, in full, the benefits of members of the plans which are already being wound up with a funding shortfall.”
He said the decision by the trustees to wind up the plan was unrelated to the business decisions of Shipham Valves.
Goddard said the trustees took independent advice from a firm of financial accountants and sought advice from the Queen’s Counsel during the negotiations.
And he stressed the scheme did not reject advice from actuarial firm Garvins to reduce its equity exposure in 1999. Indeed, Garvins was not appointed until September 2001.
Goddard rejected any suggestion of negligence in the decision-making. He said: “The trustees thoroughly investigated the financial standing of Shipham Valves and were satisfied the financial contribution offered was the best settlement the trustees could achieve.”
Before concluding the agreement with the employer, the trustees asked the High Court to sanction the compromise agreement but Goddard insists at no stage did SPAG ever threaten to take the company to the High Court.
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