Ex-partners warn KPMG to meet £70m shortfall

Link: KPMG pension dispute in court this week

In a damning letter to KPMG chairman Mike Rake, six former partners – John Barton, Michael Fowle, John Harkness, David Leake, William Tannett and Roger White – sought assurances that the firm would make up a £70m deficit in the firm’s fund.

‘We urge the board to make substantial enhancements to its likely proposals, to avoid KPMG being viewed as greedy and dishonourable in obtaining commercial advantage at the expense of pensioners and staff,’ the partners’ letter said.

KPMG was due in the High Court today for the second day of a case in which it is asking for clarification over whether its pension scheme is a final salary or money purchase scheme. If the court decides it is final salary, KPMG will have to fund the deficit.

But many expect the court to see the scheme as money purchase, which would leave KPMG with no obligation to fill the black hole. ‘Former and current partners alike will be damaged if KPMG is seen to renege,’ the former partners said.

‘We request the board to cost our suggestions and to compare their cost with that of the potential damage to the firm’s reputation.’ The partners added: ‘We hope KPMG will continue to try to be true and fair to its people.’

The firm’s pension trustees, AON, wrote to employees last August warning that it was ‘most probable’ their pension benefits would be reduced to maintain the scheme’s solvency.

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