More than 2,000 ex-Lehman bankers are set for bigger pension payments after bosses of the retirement plan struck a £675m deal to offload it to an insurance firm.
Members of the Lehman Brothers Pension Scheme will see payment restrictions – put into place after the bank’s dramatic collapse nearly seven years ago – lifted in July after insurer Rothesay Life agreed to take over the liabilities of the scheme.
Rothesay, co-owned by Goldman Sachs, Blackstone and Singapore’s sovereign wealth fund GIC, has taken on £675m worth of assets owned by the plan and will eventually pay the pensions of about 2,300 ex-Lehman employees.
Lehman pensions were paid by the UK’s pension lifeboat fund, the Pension Protection Fund (PPF), in the years after the company’s collapsed but future payments are capped at just over £36,000 a year.
From July the restrictions will be lifted and benefits will be paid in full – including back payments.
“Since the bankruptcy of Lehman Brothers in 2008, the trustees have been striving to secure the pension benefits promised to members of the scheme,” chairman of the plan’s trustee board Peter Gamester said.
“The agreement with Rothesay Life achieves this goal as it enables members’ defined benefit entitlements to be paid in full.”
PwC helped broker the deal while law firm Travers Smith also advised.