Rover pension black hole balloons

James Quinn|Daily Mail13 April 2012

MG Rover's pension blackhole ballooned to £495m in the car maker's dying days, according to the latest calculations.

The deficit, which has just been calculated and verified by a High Court-appointed actuary, is a staggering £100m more than forecast.

The main pension scheme, covering the majority of MG Rover's 6,100 former employees, is £473m in the red. Meanwhile the smaller scheme has a £22m deficit, according to the final report by actuary Garvin & Co's.

Both administrator PricewaterhouseCoopers and Rover's former holding company Phoenix Venture Holdings (PVH) have been informed of the deficit.

Independent Trustee Services' Chris Martin, acting as independent trustee to both schemes, admitted the increase in the schemes' deficits were 'quite marked'.

He added: 'They are bigger than we originally thought as they were based on end of December figures and these (new calculations) are based on the end of April.'

He will now quantify the amount owed by each of the five Rover companies in administration plus PVH, which remains solvent. PVH, run by the disgraced Phoenix Four band of directors, has already stumped up £1.7m in cash as security for whatever its share of the pension deficit might be.

Creditor documents released by PricewaterhouseCoopers suggest MG Rover's share of the deficit is £325m, which means PVH could be liable for 'as much as £170m.

Martin is keen to place both schemes in the hands of the Pension Protection Fund, which would allow ex-workers to receive reduced payments when they reach retirement age.

But under the PPF's rules on group companies, that will only be possible if PVH hands over the cash owed or is put into administration.

Successful bidders for MG Rover and its divisions will not have to fork out for any of the near-half billion pound liabilities.

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