Nearly 2,500 Lehman Brother employees will receive their defined benefit pensions in full after these were safeguarded following the settlement of a six-year investigation and legal proceedings.
Five organisations in the collapsed bank will now have to pay £184 million to cover staff pension benefits as a result of action taken by The Pensions Regulator (TPR) and the scheme trustees.
The ability of the pension schemes to pay full retirement benefits had been left in doubt following the US group’s liquidation in 2008.
Following the insolvency of numerous companies within the Lehman Brothers group, TPR’s determinations panel issued a determination in September 2010 that companies within the Lehman Brothers group should provide financial support to the Lehman Brothers pension scheme.
Stephen Soper, interim chief executive at TPR said: “The estimated £184 million settlement payment will be the largest sum paid to a scheme as a result of our actions so far.
“This is a pleasing and appropriate settlement for the 2,466 members in the Lehman Brothers pension scheme, and shows we will not hesitate to pursue regulatory action to protect members’ benefits and Pension Protection Fund (PPF) levy payers where we believe it is appropriate.
“The regulator has increasingly been required to engage its anti-avoidance powers to secure the retirement benefits of members and protect the PPF. This case demonstrates that the regulator’s anti-avoidance powers can be used effectively, even in highly complex international insolvency situations.”
Peter Gamester, chairman of trustees of the Lehman Brothers Pension Scheme, added: “This negotiated outcome is a good result for defined benefit members of the Lehman Brothers Pension Scheme.
“It has been made possible by the underlying financial strength of Lehman Brothers in the UK, and the successful administration of Lehman Brothers International Europe and other UK companies.
“The trustees would like to thank members for their patience during the difficult period following the collapse of Lehman Brothers in September 2008; but at least this patience has been rewarded by the commitment to provide funding to secure pension entitlements in full.
“We will be contacting members shortly to explain in detail the next steps.”