On the go: Wm Morrison Supermarkets group is the new sponsor of McColl’s two defined benefit schemes, in a deal that has secured the benefits of 2,000 members.
In May, Morrisons took over troubled retailer McColl’s and pledged to uphold all promises made to the schemes. McColl’s had gone into administration before a deal was agreed that transferred the retailer’s 16,000 staff and more than 1,100 stores to Morrisons.
McColl’s two schemes, which have combined assets of £130mn, have now exited their Pension Protection Fund assessment periods. Morrisons became their sponsor on July 14.
The two schemes are the TM Pension Plan and the TM Group Pension Scheme, which together have 2,085 members.
TMGPS is fully funded on a statutory ongoing funding basis, while TMPP is expected to become fully funded on a statutory ongoing funding basis next year. TMGPS has a section 75 deficit of less than £1mn, and TMPP has a section 75 deficit of £15mn.
Minesh Rana, UK pensions director at PwC, which acted as administrators for the takeover of McColl’s, said: “With current economic forecasts showing lower growth and costs rising, it’s possible more businesses will go into distress over the coming months.
“Historically in restructuring situations, the pension schemes of distressed companies often have significant deficits and this can result in the pension schemes ending up in the PPF
“However, the recent improvement in gilt yields, as well as cash contributions paid over many years, has resulted in many pension schemes now showing smaller deficits or even a surplus,” Rana continued.
“Therefore, companies in distress with well-funded pension schemes could become more common, providing stakeholders with a greater range of options and solutions in relation to pension schemes in distress situations.”
