BR pension trustees to remind Government of pledge

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Indy Politics
ANY attempt by the Government to seize pension fund assets of British Rail during privatisation would be in breach of a ministerial commitment given in 1980, the scheme's trustees believe.

The government at the time promised that the pension fund would stand alone and rejected suggestions that the government should guarantee the fund, then in difficulties, in perpetuity.

Trustees and union representatives, who are to meet John MacGregor, the Secretary of State for Transport, next week, hope to be able to use this 'commitment' to persuade the Government to abandon plans to take between pounds 3bn and pounds 4.25bn of the pension scheme's pounds 8.5bn of assets when British Rail is privatised.

Kenneth Clarke, the Home Secretary, gave the commitment while he was Minister of State for Transport in 1980 and argued against government support for the pensioners. The 1980 Transport Act sought to resolve a deficiency that the BR pension scheme then faced because of its underfunding in the post-war years. Mr Clarke said in the debate on 25 March that year: 'We are proposing a once-and-for-all settlement after which the board will basically be on its own.'

Because the fund prospered during the 1980s, the scheme's assets have grown far in excess of the liabilities. The trustees have used this surplus to enhance the pension benefits which it has been paying since 1988. Trustees fear this will no longer be possible if the Government is successful in retaining part of the assets belonging to the pension scheme. They claim this move would hit hardest those of the 340,000 members with the smallest pensions. In some cases the enhancements add 30 to 40 per cent to their BR pensions, which average pounds 44 per week.