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MGR pensions to get guarantee

Former MG Rover employees have been told their pensions are set to be protected under the Pension Protection Fund.

The 6,500 pension scheme members have been told by trustees they are weeks away from being covered by the PPF.

The fund will cover 90% of benefits.

Rover collapsed in April at a cost of almost 6,000 jobs.

Financial problems meant the company's two employee pension schemes had a deficit of £495m, raising concerns that workers would either lose benefits or have to live on reduced payments.

Trustees and the Government have been negotiating to safeguard as much of the pension schemes as possible.

"We are now confident we are very close to being able to have both schemes enter the Pension Protection Fund (PPF)," says Chris Martin, managing director of Independent Trustee Services, which is looking after the rights of Rover pensioners.

"I would imagine it would be a matter of weeks, rather than months."

Trustees will now have to finalise talks with Phoenix Venture Holdings, the company that owned and ran Rover, about how much debt they will pay off.

Once those talks are finished, the Government will clarify entry requirements to the PPF. Martin also said that the 221 pensioners who retired early and have been over paid by £200,000 between them would all face a 10% pension cut.

At best, Rover's pension schemes would have been able to pay out only 63% of their obligations. Once the schemes join the PPF, 90% of the pension payments will be guaranteed.

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