AN END is in sight to the pension saga at Sir David Murray's conglomerate, which had risked leaving scheme members with the bare minimum.

A deal has been struck which will see the members of the Murray International Holdings pension scheme likely to gain benefits greater than that provided by the state-backed pension "lifeboat".

However, plan holders are still facing months of uncertainty over how much their investments will be ultimately be worth.

Trustees updated pension holders on the latest discussions it has held with the company over addressing the deficit in the scheme, which stood at £22.5 million when last calculated, in a letter seen by The Herald.

The letter was sent to the scheme's 300 members shortly after it was revealed MIH had sold its Response call centre business, its last major subsidiary, last month.

That was the precursor to MIH closing its flagship headquarters in Edinburgh's Charlotte Square, and taking it closer to the endgame of ceasing trading altogether.

At the time MIH filed its latest accounts, its net debt stood at more than £340m.

The trustees state in the letter they have reached agreement with the group in principle for the scheme to be bought out by a specialist insurance company, a move which would result in members receiving a reduced entitlement from the plan.

According to the trustees, this would result in plan holders "securing benefits marginally above the level of those provided by the Pension Protection Fund (PPF)".

The PPF was set up to pay compensation to members of eligible defined benefit scheme in the event of a company insolvency, and where there insufficient assets in the scheme to cover PPF levels of compensation.

In situations where a scheme has collapsed and a recovery plan has failed, the payments provided through the PPF can be significantly less than the original terms of the scheme. In others some high earning plan, holders can end up with nothing.

The trustees explained the company has paid an additional contribution of £3.6m into the plan on August 26 as part of the agreement, stating this had allowed it to give MIH consent to proceed with the sale of Response.

Without that consent, the trustees said the "alternative course of action would have resulted in the Company becoming insolvent without making any additional contribution to the plan".

But the trustees note they must complete several administrative tasks on the plan's data, including assessing the actuarial and personal information on each member, before it can finalise the level of benefits members will secure.

The letter goes on to state "it will only be when all of those tasks have been completed and the trustees and the insurer are in agreement on the data that the final premium for the insurance can be established.

"Only at that point, will it be possible to determine members' actual pension entitlements and I anticipate that the process may take a further nine months before it is likely to be completed.

"The trustees will do everything they can to accelerate that process."

One plan holder expressed his "disgust" after learning about the latest talks between trustees and the company over the pension plan.

The scheme member also called for an investigation into the deals which has seen the Murray family acquire some of the assets of the MIH empire.

The pension holder, who did not wish to be named, "wants to see a full a proper investigation into the assets "sold" to the Murray family, when the pension fund is being shortchanged."

Sir David Murray has previously described reports of a £22.5m black hole in the MIH pension scheme as "alarmist".

Speaking as it was confirmed MIH head office on Charlotte Square had closed, he said: "We are putting £3.6 million into the group pension scheme and we believe that should be sufficient to give benefits in excess of the Pension Protection Fund."

A source close to the company confirmed yesterday the company has made a payment to the pension fund of just over £3.6 million, which is geared towards making sure the pension scheme does not fall into the PPF.

The source added that the payment secured the benefits for plan holders and puts them in a better position than had the scheme sought eligibility for the PPF.

A spokesman for the Pension Regulator said: "We are aware of the situation and we are liaising with the scheme trustees but we are unable to comment in detail on individual employers or pension schemes as this is restricted information."