UK - A row over the spiralling Maxwell Communications Pension Plan's deficit has broken out between independent trustees Law Debenture and the government.
The government’s pensions spokesman in the Lords Baroness Hollis has called into question the trustees’ management of the £79m scheme’s assets.
Law Debenture director Eddie Thomas promptly hit back claiming: “Any suggestion of poor management is totally unfounded.”
He added: “The asset allocation of the fund has always been based on what the independent consulting actuaries to the fund, Barnett Waddingham, have regarded as a ‘safety first’ basis.”
But Hollis has unequivocally told the 1400 scheme members – who face 50% cuts in their pensions – that they should “look elsewhere” for compensation.
The feud follows three and a half years of talks between the DWP and Law Debenture over ways to plug the fund’s shortfall, which notoriously was one of four schemes plundered by Robert Maxwell in the late 80s and early 90s.
The scheme, which has a current £40m deficit, holds 70% of its assets in bonds with the remainder in a UK equity tracker fund.
The government took over £30m in “state scheme premiums” from the Maxwell Works Scheme, after it uncovered that the fund was over compensated.
Law Debenture said this cash – which was part of a £276m donation raised by the private sector to help aid Maxwell workers – should be redistributed to other Maxwell schemes. Government ministers have rejected this request.
Thomas added: “We have not been asking the government for tax payers’ money. We are asking for private money back and put into the proper place.”
Lawyers have warned that without the government’s help the members have little hope of regaining any of their lost cash – and any action against the trustees would be fraught with difficulties.
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