Vanishing trick A nother secret weapon for the Chan- cellor's armoury
comes to light in the unlikely armoury of Gomme Holdings, Which makes G-Plan chairs. Gomme has had a rough time, but the pension fund has done better than the company. Now it is to be wound up, and a three-million-pound Surplus paid back to Gomme, which will instal a new fund, providing the same benefits as the old. Many companies have the chance to follow. Falling inflation, falling payrolls, and rising stock markets have left their pension funds bigger than they need to be to meet their obligations — 'over-funded', as the jargon has it. The Chancellor, of course, is eyeing the pen- sion funds: Jock Bruce-Gardyne, on page 22, surveys the politics of the Budget choice. The Institute of Fiscal Studies, in a report commissioned by the funds' associa- tion, reckoned that the Chancellor could take £850 million and more out of a tax on the funds' income, which would be covered by a ten or 12 per cent increase in contributions from employers and em- ployees. What the report does not observe is that the Chancellor might well have the tax without the increases. If the funds are over-funded, as Gomme's was, the tax could simply bring them back into line with their obligations. No one would pay more, and no one would feel worse off. . . . Such are the by-products of our present system of occupational pension funds, with their £100,000 million of assets. If each of us directly owned his right in that £100,000 million — if our pensions were personal there would be no chance of such conjuring tricks by employers, or by Chancellors.
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