Last year the Annual report of the pension scheme for Barnet contained a note as follows :-
Admitted Body, Connaught Partnerships formally entered administration on the 8th of September 2010. Whilst the consequences of the administration are under consideration, the full impact on the London Borough of Barnet Pension Fund is unlikely to be known until the administrators have completed the administration process.
The chickens have now come home to roost. KPMG, the administrators, of Connaught recently wrote to say that the claim by Barnet Council is unsecured. That is accountancy parlance & means that, under Insolvency Law, Barnet Council sit with all other unsecured creditors at the end of the line and what is more will receive at most 1% of their money back.
So here is what the 2011 report says.
Connaught Partnership, previously an Admitted Body, went into administration with effect from 31/08/2010. A pension fund deficit of £1,492,000 has been calculated by the fund actuaries. The Council’s legal team are currently liaising with Connaught’s Administrators (KPMG) for the recovery of these monies. KPMG have confirmed the pension deficit is classed as unsecured, non-preferential debt. Legal have also queried the position on unpaid employer contributions and are awaiting a response from the Administrators.
So what doesn't the report say ?
Who was meant to be monitoring the payments, was the bond in place to secure them against insolvency ?
Has someone right royally messed up ?
We should be told.
It looks like another glorious day in the annals of Barnet Council.
The shortfall will have to come from somewhere.
Only three choices look like :-
- the Council Tax Payer
- current employees in the pension scheme