Nearly 100 MG Rover pensioners are at the centre of an investigation by the Government’s pensions watchdog into their retirement funds – more than nine years after the car firm went bust.
The near decade-long delay to resolve the level of payments to members of the MG Rover Group Senior Pension Scheme was today branded ‘astonishing’ by Northfield MP Richard Burden.
The Post can reveal there is still no sign of any resolution of the status of the pension fund, which covers a total of 96 former managers of the car firm which collapsed with the loss of 6,500 jobs.
More than seven years after the much larger MG Rover pension scheme covering the vast majority of the workforce was transferred to the Pension Protection Fund, the smaller scheme remains in an ‘assessment’ period.
The effect of the delay means that former managers eligible for monthly payments have still not been provided with a definitive payout level for their pensions.
Those who are being paid under the terms of an interim agreement qualify for 90 per cent of their pensions under the Pension Protection Fund, which was set up by Tony Blair’s Labour government days after MG Rover collapsed with debts of around £1.4 billion in April 2005.
But an ‘ongoing investigation’ by the Pensions Regulator has kicked the issue of the Senior Pension Scheme into the long grass, with little sign of any conclusion.
It is understood that negotiations between the Pension Protection Fund, potential fund managers, including insurance companies which may buy out members’ benefits, and the trustees are still going on. The negotiations will eventually determine the value of the pensions going forward, both for existing recipients and deferred members.
The ongoing investigation by the Pensions Regulator has also frozen the allocation of any funds from £23 million raised following the liquidation of MGR Capital, MG Rover’s finance and lease loan book.
The destiny of the multi-million pound MGR Capital sum remains unclear after the Pensions Regulator gave notice to liquidator Paul Stanley of Begbies Traynor of a potential multi-million pound claim on the cash.
The notice from the regulatory body means that MGR Capital joint shareholders the Phoenix Four and HBOS cannot be allocated the funds until the Pensions Regulator claim is rejected or approved. But the claim has frozen the process, leaving the £23 million fund in limbo.
Long-standing Northfield MP Richard Burden, whose constituency covers Longbridge, said: “It’s astonishing that this is still dragging on after all these years and I am now writing to the Pension Protection Fund to try to find out what the hold-up is. Surely they must know by now whether or not they think there are grounds for a claim against MGR Capital.
“Remember, there will still be other outstanding issues on MGR Capital even after any claim is resolved.
“Members of the Phoenix Consortium have already made millions out of MG Rover. They should give to their former employees whatever they still stand to make out of MGR Capital.
“Former MG Rover workers lost their jobs and their families so much more. They did not get a penny out of the Trust Fund which the Phoenix Four made a big thing of setting up when the company collapsed.
“Even after all these years, it would be wrong for any or all of the Phoenix Four to pocket yet more money while their employees still get nothing.”
A spokesman for the Pension Protection Fund said: “The MG Rover Group Senior Pension Scheme is still in the PPF assessment period. The Pensions Regulator has an ongoing investigation regarding the potential use of its powers in respect of the MG Rover Group Senior Pension Scheme.
“Until such time as this investigation has been concluded, the scheme will remain in an assessment period. We are unable to comment further on the specifics of this at this time.” The main MG Rover Group Pension Scheme transferred to the PPF on March 21 2007.
Meanwhile, a spokesperson for the Pensions Regulator said: “The Pensions Regulator has an ongoing investigation regarding the potential use of its powers in respect of a MG Rover pension scheme. We are unable to comment further on the specifics of this at this time.”