The first pay-out by the Pensions Compensation Board (PCB) - which was set up in the wake of the Maxwell scandal - amounted to pounds 1,750 each for people who had not received a pension in two years.
The Warwick Group pension scheme went bust after the group's main company, the industrial investment firm Gidney Securities, crashed with huge debts in 1996. The pension scheme's only assets were a loan to the company and a business park mortgaged to more than its value. The PCB, chaired by Julian Farrand, found "reasonable grounds" for believing the collapse of the fund's value was the result of dishonesty and that Warwick Group used money that belonged to its pensioners.
But Graham Pitcher of Bradstock Trustee Services, the Nottingham pension specialist acting for the 19 pensioners and 250 other scheme members, said the pounds 33,300 compensation is a "drop in the ocean". "Members have not received pensions since December 1997.... We did the best we could, but we were restricted by regulations," he said.
In its annual report to the Secretary of State for Trade and Industry, the PCB said it could only compensate pensioners for acts of dishonesty committed after the PCB came into being. "Unfortunately for the scheme members, the majority of the financial transactions which had led to the scheme's predicament occurred before 6 April 1997 and were beyond the remit of the board."
The Warwick Group scheme is hoping for a second, smaller pay-out from the PCB in coming weeks. Bradstock is claiming compensation for a further pounds 5,000 of alleged dishonest payments out of the scheme.
As the pension scheme cannot afford to sue the directors of Gidney Securities for the estimated pounds 8m shortfall, the pensioners' only hope is a criminal prosecution by the Serious Fraud Office or police.
Norman Gidney, 67, and Simon Gidney, 38, were the sole trustees. They were arrested but released without charge.