Ombudsman steps in to solve S&N pension dispute
The UK Pensions Ombudsman is to investigate allegations by tens of thousands of pensioners of former brewer Scottish & Newcastle that they have suffered “a raw deal” following its takeover by Heineken in 2008.
The Ombudsman’s decision to adjudicate, announced shortly before Christmas 2011, is significant as the eventual finding will be “final and binding”, save any appeal to the High Court in London on a point of law.
The dispute between Heineken and the S&N Pensions Group (SNPG) centres on undertakings given by the Dutch brewer at the time of the takeover to continue a decades‑long practice by the Scottish company of providing inflation‑linked pension increases. Although these increases have always been "discretionary", pensioners think that they are entitled to them.
Heineken did pay an inflation‑linked increase in 2008, and there was no such rise in 2009 when inflation was virtually zero. However, it paid nothing for 2010 when inflation was running at more than 4 percent.
The brewer, which acquired S&N’s UK business as part of a joint break-up bid with Carlsberg of Denmark, denies that it has broken any commitments. It has said that the decision it took in 2010 was based on the outlook for the pension fund at the time – the fund’s deficit was rumoured to be GBP 570 million/EUR 690 million – and would be reviewed again this year. It has also stressed that the payments have been explicitly “discretionary”.
The SNPG approached the Ombudsman with its case for an official probe in the summer, and has now been told that there is sufficient reason to hold a formal inquiry.
Separately, the SNPG confirmed that it has been told its case will be included “some time early in 2012” in an inquiry into foreign takeovers of British companies by the House of Commons business select committee. According to British media reports, the SNPG had expected such a hearing to take place after the summer recess 2011.
A Heineken spokesman said: “We are fully aware that the Pension Ombudsman has agreed to impartially review complaints made by a number of S&N pensioners, indeed we informed those pensioners who were not satisfied with our direct responses to them that this was a route that they may wish to take.”
Heineken had fully co-operated with the Ombudsman’s office over the past few months in answering Ombudsman queries, he said.
Looks like this will drag on for months to come.
