On the go: The trustee of the two defined benefit schemes sponsored by retailer McColl’s has called for the link with the sponsor company to be respected after administrators were appointed to oversee the fallout from the retailer’s collapse.
Consultancy PwC has been appointed as administrator after rescue talks for the embattled convenience store chain — which has more than 1,100 stores around the UK and employs 15,000 staff — failed, according to reports.
The chain has been put into a pre-pack administration that would allow administrators to sell assets off and move McColl’s schemes into the Pension Protection Fund. The Pensions Regulator is in touch with the schemes’ trustee.
The two schemes in question are the TM Group Pension Scheme, which has 1,170 members, and the TM Pension Plan, which has 915 members.
The TMGPS is fully funded on a statutory ongoing funding basis and therefore requires no deficit recovery contributions.
It is fully funded on a PPF basis and has a section 75 deficit of less than £1mn.
The TMPP is expected to become fully funded on a statutory ongoing funding basis next year, at which point the current £1.75mn annual deficit recovery contributions would be expected to end
It is fully funded on PPF basis and has a s75 deficit of £15mn.
A spokesperson for the trustee said it was aware of reports that several bidders have expressed interest in acquiring McColl’s, but called for the link with the company not to be broken.
The spokesperson said: “The pension schemes are significant stakeholders in the company, and the trustees call on all potential bidders to make clear that they will respect the pension promises made to the 2,000 members by McColl’s and its subsidiaries, and will not seek to break the link between the schemes and the company.
“The two pension schemes are relatively small compared with the McColl’s business, and funding them would clearly be manageable for the ongoing business, or for anyone who acquires it.”
The spokesperson continued: “Breaking the link between the schemes and the sponsor company, by way of a pre-pack administration, would represent a serious breach of the pension promises made to staff who have served the business loyally over many years, and risks causing the schemes to enter the PPF with a resulting reduction in benefits.
“The trustees are continuing to liaise closely with TPR, to establish how best to protect scheme members. They will continue to work with stakeholders to protect members’ interests and will keep members updated.”
A TPR spokesperson said: “We are monitoring events regarding McColl’s and are in discussions with the trustee of the company pension schemes in our role to protect savers.”
McColl’s has been approached for comment.
