Sorting Out the Pensions

Abstract

It is doubtful that even a dozen people understand all the implications of NFC’s pension problems. On top of the historical problems — some British Rail employees are in NFC funds and vice-versa — there were actuarial (i.e. valuation) and political problems to be solved at the time of the buy-out. There is no denying that the details are technical, but equally there is no denying just how important they were: the Government gave back more than 80 per cent of the £53.5 million it was paid for NFC to put the pension funds back onto a footing that would be acceptable in a normal commercial enterprise — where there is no automatic government guarantee to make good any shortfall in the pension fund and so the company itself has to transfer money to guaranteed pension funds.

More than £47 million of the money which the Secretary of State received for NFC will be paid to the NFC Pension Funds. The Government will also continue to provide some other financial support for the Funds.

Extract from NFC p.l.c. Prospectus, Appendix 9.