Missing Billions

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THE 200,000 electricity pensioners affected by today's ruling by the Court of Appeal could each stand to benefit by more than pounds 500 a year if the National Grid does not appeal to the House of Lords.

While the case involved just the Grid, the ruling will set a precedent for all the other former state-owned electricity companies, including National Power, PowerGen and the regional electricity companies.

Bacon & Woodrow, a firm of actuarial consultants, estimate the pensioners would each be entitled to an average pounds 7,500 share of the pounds 1.5bn surplus which may have to be returned to the pounds 18bn fund. That would mean a benefit of between pounds 500 and pounds 750 a year, or an extra pounds 10 -15 a week. The exact figure will depend on the final salary and length of service of each pensioner.

Occupational pension schemes hold more than pounds 650bn in member's assets and own more than one-third of the stock market equity. According to Inland Revenue statistics, there is at least pounds 4bn in official pension fund surpluses. But experts believe the real figure runs into tens of billions.

Pension experts warned the case did not mean employees could claim ownership of surplus. And while the judgment says the National Grid scheme acted outside its powers, it did not insist the pounds 46m at issue must be refunded.