Mayor Boris Johnson has approved a Greater London Authority (GLA) deal which will see it take up £3m in costs to guarantee full pension rights to former Visit London staff.

The announcement was made on 21 June in front of the London Assembly's Economic, Culture and Sport Committee by Sir Peter Rogers, a mayoral adviser.

The scheme's rescue was approved formally by the GLA a day later when the Mayor, Visit London's administrators and the pension trustees, all agreed to the deal.

Talking to Pension Funds Insider, Ylva French, chairman of the Visit London/London Tourist Board Pension Action Group said: "We are delighted that this matter has been resolved and that existing pension benefits will be retained for existing and deferred pensioners of the London Tourist Board and Visit London. We are grateful for the support of members of the Economics Culture and Sports [ECS] Committee of the London Assembly in this matter and are now waiting for final confirmation from the British Tourist Board Pension Fund."

Dee Doocey AM, Chair of the ECS Committee said: "This deal will come as a great relief to all of those businesses owed money and members of the pension scheme who faced uncertainty after Visit London went into administration. We welcome the agreement, but questions still remain about the way decisions were made and how this situation arose in the first place."

The deal currently made will see the GLA pay £6m into the pension fund and receive all outstanding assets of Visit London. These will be used to pay creditors. The exact costs will depend on the final level of Visit London's net assets available for distribution but it is estimated to cost to the GLA a net sum of £3m.

This should allow the Visit London portion of the British Tourist Boards' Pension Scheme to continue on a self-sufficient basis, with no reduction in the accrued benefits of its members, and for the other creditors of Visit London to make a 100% recovery of amounts due to them.

The committee spoke to Sir Peter as part of an investigation into the way decisions were made at London & Partners (L&P), the city's new promotional agency, and the impact these decisions had on the collapse of Visit London and subsequently pension holders and creditors.

Two hundred employees of Visit London Ltd were left without a full pension earlier this year after their organisation merged into L&P.

The Visit London section of the British Tourist Boards' (BTB) pension scheme, was faced with a deficit of nearly £500,000 at the time. Visit London itself had to go into administration when it could not meet the £9m it needed to wind up the scheme.

Although the Pension Protection Fund (PPF) was likely to pick up the liabilities this would have almost definitely resulted in the staff losing over 10% of their pension benefits.

A full report focusing on the lessons learnt from the establishment of London & Partners will be published in the summer.

First published 30/06/2011

azeevalkink@wilmington.co.uk