The UK pension plan (previously called a final salary pension scheme) was paid into by former and current employees after it was formed in 1974. It has close to 1200 members, with around 500 currently claiming a pension.
Sotheby’s is aiming to sell the scheme to two insurance firms and wind up the plan. However, the Association of Sotheby’s Pensioners (TASP) has sought legal advice and now individual members are considering the action they can take.
Although Sotheby’s proposal is legal, the members believe they were not kept properly informed of the changes to the plan over the years and therefore made f inancial plans based on incorrect knowledge.
For example, from 1994 the scheme was changed so that Sotheby’s could agree or disagree to pay increases to match inflation.
The members believe they were not notified. In 2014 Sotheby’s said it was no longer minded to pay inf lationary increases and when the scheme is sold increases will not be paid.
The outcomes for members will also differ due to pension regulation changes in 1997.
One member told ATG: “When we were working at Sotheby’s our pay was low but we were told our pensions would make up for it. Our pensions were almost a deferred salary.”
Since TASP was founded in 2015 it has sought to reinstate the status quo for existing and deferred members.
Eileen Goodway, a member of the TASP committee, said: “TASP believes that the company’s abandonment of discretionary increases is contrary to the spirit of its custom and practice which provided pensioners with inflation-driven increases for over 30 years. TASP’s next steps are looking at other legal avenues and organising a demonstration, just as the Mirror Group pensioners did in 1992.
“Anyone who is not a TASP member but is affected, get in touch at email@example.com.”
Sotheby’s was bought by billionaire Patrick Drahi for $3.7bn including debt in 2019. According to Bloomberg, Sotheby’s has selected Goldman Sachs and Morgan Stanley to work on a potential US stock market listing. Prior to Drahi buying the firm, it had been a listed company for three decades.
In a recent trading update last year Sotheby’s said: “The UK Pension Plan will now go through the required process in order to proceed to a full buyout and ultimate wind-up of the plan in 2022.”