Lehman's London staff win $300 million pensions fight
More than 2,400 former Lehman Brothers bankers based in Britain will have their pensions paid in full after winning a six-year battle.
More than 2,400 former Lehman Brothers bankers based in Britain will have their pensions paid in full after winning a six-year battle to receive their money from parts of the collapsed U.S. investment bank.
The remains of the bankrupt Lehman group will stump up 184 million pounds ($306 million) so the pensions can be paid in full under a deal brokered by Britain's pensions regulator and announced on Tuesday.
The deal works out at an average pension of 75,000 pounds ($124,700) for each of the 2,466 members of the scheme.
Lehman Brothers collapsed in September 2008 in the highest-profile failure of a bank during the financial crisis.
Thousands of Lehman Brothers' staff had their wealth tied up in the Wall Street bank, which had long encouraged a high degree of share ownership among employees.
The Pensions Regulator said the agreement marked its biggest ever win and avoids the need to put the pension scheme into the Pension Protection Fund, which can pay compensation to pension scheme members when a company collapses.
The regulator had said that companies within the Lehman group should provide the cash to meet the UK pension plan's liabilities. The case has been tied up in court since, partly because various Lehman operations had made claims on the leftover assets.
The administrators of Lehman Brothers' European arm said it would fund the pensions promised under the scheme after receiving "significant" contributions from other parts of the group. It said the pension benefits are likely to be secured under a bulk annuity policy with an insurance company in the future.
Creditors of Lehman Brothers' European arm have been paid in full after the carve up of the bank's carcass.