US investment bank Lehman Brothers, which collapsed in 2008 at the peak of the financial crisis, has agreed to pay £184m to nearly 2,500 former employees to end a six-year legal battle with The Pensions Regulator over pension entitlements.
Action was taken by TPR and pension schemes trustees of behalf of the firm's British-based bankers following the collapse of the firm, which triggered further shocks in the financial markets. It was the highest-profile bank to fail during the credit crunch, and the TPR began action to get the remains of the bank to provide financial support to the Lehman Brothers pension scheme.
The settlement, agreed on August 19, means companies within the Lehman Brothers group will buy out member benefits in full and avoid the pension scheme's entry into the Pension Protection Fund.
Stephen Soper, the regulator's interim chief executive, said it was a 'pleasing and appropriate settlement for the 2,466 members in the Lehman Brothers pension scheme' in what is the largest settlement reached as a result of the TPR's work.
'It shows we will not hesitate to pursue regulatory action to protect members' benefits and PPF levypayers where we believe it is appropriate.
'The regulator has increasingly been required to engage its anti-avoidance powers to secure the retirement benefits of members and protect the PPF. This case demonstrates that the regulator's anti-avoidance powers can be used effectively, even in highly complex international insolvency situations.'