UK - Thousands of former workers at Maxwell Communications will have their pensions halved after the Government refused to cover its deficit.
Trustees of the £79m Maxwell Communication Pension Plan (MCPP) have sent letters to 944 deferred members and 381 pensioners informing them of the cuts, after they failed to persuade the government to plug a £40m deficit in the scheme.
The Government had previously brokered a settlement for the Maxwell pension schemes in 1995, which gave tax breaks and donations to help replace the £460m Robert Maxwell stole from the four schemes in his publishing group.
However, the deal proved not enough to cover the full MCPP deficit, and in 1999 the fund asked the government to help it cover what was then a deficit of £10m.
The fund’s trustees – Law Debenture – said: “We are surprised and disappointed not only by the government’s decision, but also by the time that it has taken them to reach it and communicate it to us.”
A DWP spokeswoman explained it was unwilling to underwrite the fund – something she said would set a precedent for other pension schemes.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.