Pension debts claim Scottish voluntary organisation victim

Governance | Niki May Young | 28 Jul 2010

Moray Voluntary Service Organisation (MVSO), a Scottish support service for over 400 member voluntary organisations, is in liquidation due to a £60,000 pensions debt it cannot repay.

The insolvent organisation will hold an EGM on 11 August to transfer restricted assets - those provided by national and local governments which cannot be used to repay the debt - to a new organisation set up by the board to replace MVSO.

During the EGM chairman Alastair Kennedy will ask members, which include Alzheimer's Scotland, Amnesty International Moray Group and Barnardo's, to transfer from MVSO to its replacement, Voluntary Action Moray. “It will give members the same support if not better support than they get currently. The only difference is that we’ll have no pension debt,” he said.

Kennedy told Civil Society that the problem arose when previous board members invested in an unaffordable pension scheme, and not because of the end of the Scottish Voluntary Sector Pension Scheme: “It’s an unfortunate situation that we have inherited,” he said. “As far as I can tell the organisation was never in a position to afford that kind of pension scheme.”

The organisation began to struggle after changes to the minimum funding legislation came into force at the start of 2008, making its pension scheme unaffordable.

Whilst MVSO believes it was mis-sold the pensions rate and has disputed the £60,000 debt amount, it is unable to afford legal action.

Asked whether the Scottish Government was able to intervene Kennedy said: “A lot of MPs and MSPs have been very very supportive but I believe it would require a change in legislation. The Scottish Government has been very helpful in allowing us to do this so we have no problems whatsoever with the government in dealing with this.

“It’s not a nice situation, it’s a lose-lose for everybody. But we’ve explored every route and this appears to be the only way to go. But, you know, onwards and upwards.”

Voluntary Action Moray will run with the same board as MVSO and provide the same services which include training events and a range of advisory services.

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