MFI wins £12m pension settlement

FURNITURE group MFI has won a £12m settlement from its former pension fund adviser, Heath Lambert, over administrative errors that added as much as £50m to the retailer's pension fund deficit.

The problem dates back to 1994 when the pension age for male and female employees should have been equalised at 65. Although plan members were told of the changes, the relevant documentation was not amended.

MFI said today it is continuing to take advice on action over recovery of any further amounts from any other third parties on whose advice the group and the trustees of the pension plan relied.

MFI's overall pension shortfall is as much as £295m, or £206m net of tax. Directors are looking at ways of handling the deficit and establishing the future level of contributions.

The company recently increased its annual contribution to the fund from £15m to £35m. Seymour Pierce's Richard Ratner described the £12m payout as 'a drop in the ocean'.