PracticeAuditKPMG partners told to meet pension deficit

KPMG partners told to meet pension deficit

Partners will need to find another £60m to plug £88m hole in fund

KPMG partners will have to find £60m over the next five to 10 years to settle
the firm’s pension fund deficit following a decision by the House of Lords to
deny an appeal on the issue.

The firm has £28m put aside to plug the gap, but partners will have to find
the rest by 2016 at the latest.

KPMG’s annual report for 2005 put the total deficit at £88m with the fund
currently standing at £321m, but this did not take account of the money set
aside.

One pension fund holder told Accountancy Age: ‘I don’t blame KPMG
partners for taking the action they’ve taken I just hope they honour what the
court has decided.’

The decision hinged on whether KPMG’s fund was a defined benefit scheme,
making the firm liable for the deficit, or a money purchase scheme, which would
have moved the cost burden elsewhere.

In August last year KPMG lost a High Court ruling which decided the fund was
not money purchase. The firm had applied to the House of Lords for leave to
appeal that decision, but today saw that application denied.

Eddie Donaldson, head of human resources at KPMG, said the firm had accepted
today’s ruling and would work with the fund’s trustees, Aon, to ensure the
deficit was met.

‘The issues involved some complex and technical areas of pension law and KPMG
had received strong legal advice to support its view that the scheme was money
purchase in nature,’ he said.

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