T&N retirees miss out on top-up after buyout

The scheme has secured Pension Protection Fund (PPF) level benefits in a £1.1bn buyout with Legal & General (L&G) and the insurer has indicated there will be a small amount of money left over to give members a “one-off uplift”.

But those members who will not receive the full sum usually paid out by the PPF, having already retired on a final salary payout of more than £36,000, have been fighting for this money to be redirected towards them specifically, giving them the same 90% of benefits owed as all the other members.

But the T&N trustees have told PW this would contradict section 73 of the 1995 Pensions Act and will not happen.

The trustees said: “The law sets out how the trustee must apply the scheme’s assets and is clear that we must use any money in excess of that required to secure PPF benefits for the benefit of all members.  

“There is the prospect of a small one-off uplift to all members’ annual pensions in due course – but we cannot use this additional money to favour one group of members over another.”

Grenville Hampshire, one of 33 members most affected by the cuts, claimed the legislation effectively punishes loyal service.

The members receiving less than 90% already suffered a blow when pensions minister Steve Webb wrote to them in May saying he did not believe extra benefits for certain members was legal or an area for which he was prepared to consider amending the law.

Webb said he “had looked at a wide range of options in an attempt to improve the position [of the members] at a reasonable cost, and without being unfair to other people entitled to PPF compensation… [and] have reluctantly concluded that I cannot find a way forward”.