Honey I shrunk the pension fund

There has been quite a lot of interest in the fate of my (and a lot of other people's) EMI pension following my post in October last year. Another letter arrived from the EMI Group Pension Trustees today which says:

'In mid December we reached an agreement in principle with EMI and its ultimate investor, Terra Firma, that the Fund would be granted a meaningful amount of watertight security, which would rank equally with the security granted by EMI to Citi, the bank that loaned Terra Firma the money to take over EMI.

Since that agreement, however, detailed discussions have revealed that the form of security offered does not rank equally with the bank's in certain important respects and is not sufficiently robust in its terms for the Trustee to be able to rely on it in circumstances where it would be needed to support the Fund. In the absence of meaningful and watertight security, and as EMI is not prepared to put forward an alternative funding package, the Trustee has concluded, with regret, that it has no option other than to inform the Pensions Regulator that there is no reasonable prospect of reaching agreement with EMI and Terra Firma on funding.'

As EMI's new owner Guy Hands, whose personal wealth with his wife is estimated to be £200m, said in a recent interview - 'We will fight to come up with a solution to the problems that face the entire recorded music industry'. It's a pity that the solution doesn't seem to include staff pensions.
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EMI - here are my thoughts

Email received - Hi, EMI Classics are running a competition on their site where you can win CDs of your choice from their catalogue if you submit a review of one of their albums. I thought this was something the readers of your blog might be interested in. Please have a look at the link below (deleted) and let me know your thoughts? If you would like to include some information I can send you some assets.

Thanks! Naomi Snuggs
http://www.headstreampr.com/

Naomi, here are my thoughts. You sort out my EMI pension and I'll plug EMI Classics' competition? A deal?
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His Master's Voice and staff pensions

Dear pension fund member,

EMI Group Pension Fund

As you are probably aware, EMI Group plc has been taken over by Maltby Limited, a company set up by the Terra Firma group. The takeover was completed on 17 August 2007 and EMI Group plc has subsequently been delisted from the London Stock Exchange.

Despite its best efforts over a period of months, both preceding and immediately following the takeover, the Trustee Board of the EMI Group Pension Fund has not been able to reach agreement with the new owner regarding the funding of, and security available to, the Fund from 1 April 2006 (31 March 2006 is the date of the last funding valuation). Accordingly the Trustee has referred the matter to The Pensions Regulator who will initiate proper process for resolution under UK legislation. This is the normal procedure when a sponsoring company and trustees of a pension fund cannot agree the valuation basis and the contributions required.

We shall keep you informed as to developments and, in the meantime, please be assured that the Company is continuing to contribute to the Fund on the basis agreed with the Trustee at the previous valuation. This letter is for information only and no action is required on your part.

Yours sincerely
EMI Group Pension Trustees Ltd
3 October 2007

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