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MG Rover pension black hole grows to £495m

MG Rover’s pension deficit grew by £100m to £495m in the carmaker's dying days.

The shortfall, which has just been calculated and verified by a High Court-appointed actuary, is £473m in the red.

A seperate smaller scheme has a £22m deficit, according to the final report by actuary Garvin & Co’s.

Both administrator PricewaterhouseCoopers and MG Rover’s former holding company Phoenix Venture Holding (PVH) have been informed of the deficit.

Independent Trustee Services’ Chris Martin, acting as independent trustee to both pension finds, admitted the increase in the schemes’ deficits were ‘quite marked’.

He added: “They are bigger than we originally thought as they were based on end of December figures and the new calculations are based on the end of April.”

He will now quantify the amount owed by each of the five Rover companies in administration, plus PVH, which remains solvent.

PVH, run by the Phoenix Four band of directors, has already given £1.7m in cash as security for whatever its share of the pension deficit might be.

Creditor documents released by PwC suggest MG Rover’s share of the deficit is £325m, which means PVH could be liable for as much as £170m.

Martin said he was keen to place both schemes in the hands of the Pension Protection Fund, which would allow ex-workers to receive reduced payments when they reached retirement age.

But under the PPF’s rules on group companies, that will only be possible if PVH hands over the cash owed or is put into administration.

Successful bidders for MG Rover and its divisions will not have to pay for any of the near half-billion pound liabilities.

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