CABs in London face crisis over pensions shortfall

Citizens Advice Bureaux in London face a potential financial crisis because of deficits in the organisation's pension scheme of up to £2m.

Several bureaux in the capital will face huge bills that will have to be paid off within weeks once the few remaining staff in the final-salary pension scheme leave.

According to one source, bureaux could be forced to close as a result of the deficits, which range between £250,000 and £2m.

Negotiations on a solution are continuing with Citizens Advice National Association, the main employer in the scheme. The association has warned that it cannot bail out individual bureaux.

"We are aware that there is a significant problem caused by the pension deficit in London," said Simon Bottery, director of communications at Citizens Advice. "We are working with bureaux on how we resolve it. It's going to need a joint solution, but we're not in a financial position to underwrite individual bureaux."

The problem arose because all 22 London bureaux share the final-salary pension scheme with their national office. The scheme was closed to new members in 2000, and now several bureaux have only a few staff left in the scheme. If they leave, pensions legislation stipulates that the deficit must be paid off immediately.

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