The Pension Surplus Scandal

During the period 1989 to 1998, Actuarial Reviews of the RO Pension Fund showed the following "surplus" funding situations:-

1989 £144million
1992 £93 million
1995 £84 million
1998 £26 million

Between each Review the Company proposed ways to spend these alleged surpluses ( see Inland Revenue comments ) and the Trustees agreed. The Trustees never put forward any spending proposals of their own. This is how the money was used -

Distribution of surplus

  • The Employer was allocated £119.8M (55%) for the reduction or cessation of pension fund contributions and also benefitted by being able to fund redundancies as early retirements (23%).
  • The in service members, i e those currently employed, benefitted by receiving a reduction or cessation of pension contributions (13%).
  • Minor adjustments were also made to pensions by improving the dependants provision from 1/2 to 2/3 in the Crown Service scheme and some harmonisation of minor differences between the different sections of the scheme (9%).

 

In the light of subsequent developments we believe that the disposal of these alleged "surpluses" was ill-advised. We noted that no improvements were allocated to pensions already in payment.

The distribution was grossly unfair.