KPMG sweats on pensions

Link: Ex-partners warn KPMG to meet £70m shortfall

The Big Four firm was in the High Court last week to learn whether its pension scheme was final salary or money purchase. If the judge rules it is the former, KPMG could be forced to honour the deficit.

‘The evidence was heard last week, and the judge will now come back with a verdict hopefully by the end of term, which will be the end of July,’ a KPMG spokesman said.

Outraged former partners of the Big Four firm wrote to chairman Mike Rake demanding that he honour the pension deficit regardless of the court’s decision. The six former partners warned of the reputational damage that could be caused by failure to honour staff pensions.

‘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,’ their letter said.

‘Former and current partners alike will be damaged if KPMG is seen to renege,’ they added.

A spokeswoman for the firm refused to comment on the correspondence, saying it was a ‘private letter’ and that it would wait for the outcome of the court case before deciding on which course of action to take.

Last August KPMG’s pension fund trustees AON, wrote to employees warning them that it was ‘most probable’ their pension benefits would be reduced to avoid insolvency for the scheme. AON’s warning followed earlier warnings from the former trustees at Capita Trustee Services.

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