Colliers pension holders who had been counting on a generous final salary payout could be left with just £29,000 pa following the pre-pack administration of the agent.
The Conrad Ritblat pension scheme, which has a deficit of £6.6m, according to the firm’s 2010 accounts, was not included in this week’s £13.8m takeover by shareholder FirstService.
The pre-pack deal, revealed by EGi on Tuesday evening, was completed at 3.30am on Wednesday 28 March.
The pension scheme, closed to new entrants since April 2001, will be transferred to the government’s Pension Protection Fund. The PPF pays members up to 90% of their entitlement, but is capped at £29,000 pa.
Tony Horrell, who continues as Colliers UK & Ireland chief executive, said: “The pension fund was part of the company’s liabilities that the purchaser was not prepared to take.
“The takeover negotiations involved a number of different stakeholders and we came out with a transaction which works. Any alternative might not have been palatable to a larger number.”
He added that the “vast majority” of the pension scheme’s 50 Colliers employee members and around 200 external members “are way below the cap”.
However, one pension-holding former employee said that the offloading of the scheme would have a real effect on people’s lives.
“There are a lot of long-serving Colliers people that will have paid almost their entire career into the pension scheme and that would have potentially been looking at receiving half to two-thirds of their final salary,” he said. “Expectations could have been for a pension of £60,000-£70,000 a year. Now they’ll getjust £29,000 pa.”
Only 40 of the 250 pension holders are already receiving their pension.
A pre-pack administration does not always see the transfer of pension schemes to the PPF. DTZ’s purchase by UGL included its final salary pension scheme.
bridget.o’connell@estatesgazette.com
