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Vauxhall puts the brakes on pension transfers

Vauxhall Motors is the latest blue-chip employer to lock final-salary members into its underfunded pension scheme, raising IFA fears of a trend developing where trustees of schemes of well established companies refuse transfer valuations.

A subsidiary of General Motors, Vauxhall is relying on Opra&#39s decision to allow schemes to defer transfers until new rules come in that will allow lower valuations.

The move will trap 15,000 members in the £1.3bn fund. Opra says trustees can only refuse transfer valuations if they have explored all other options.

Not specifically referring to Vauxhall, Opra said employees could not always assume that an international parent would fund a pension deficit for a local scheme.

Vauxhall manager of business affairs David Crundwell says: “At our 2002 valuation, the fund exceeded MFR. We believe that suspending transfers is the most prudent thing to do, pending the new regulations.”

Opra communications director Nick Edmans says: “Speaking generally, regardless of a company&#39s size, it can still cause problems for its business and therefore its employees if it is forced to take drastic action to remedy deficit problems.”

Millfield pensions specialist Graham Duckett says: “Opra and the Government should be making companies put more cash in rather than letting them off the hook with weaker transfer values.”

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