A UK clothing retailer’s pension scheme has been rescued following intervention by The Pensions Regulator, in cooperation with the trustee and the country’s lifeboat fund for defined benefit (DB) plans.
The Edinburgh Woollen Mill pension scheme, which had 219 members as at 5 April 2024 and £37m (€43m) assets at its March 2022 valuation, was at risk of entering the Pension Protection Fund (PPF) following the insolvency of the scheme’s sponsoring employer in November 2020.
The regulator today said that, working with the PPF and pension scheme trustee, it had reached an agreement with the new owner of the sponsoring company, Purepay Retail limited, for Pureplay to become the scheme’s statutory employer after it bought the business out of insolvency.
Taking over as the scheme’s statutory employer, Purepay made a lump sum cash contribution of £7m to the scheme and agreed a three-year recovery plan for the scheme’s latest triennial valuation.
The pension plan is now funded above the PPF funding level and is expected to achieve full funding on a low dependency basis within the next three to four years.
Without the rescue, the scheme would have transferred into the PPF or secured benefits with an insurer, or similar, which would likely have been in excess of PPF levels but below full benefits.
Gaucho Rasmussen, executive director of regulatory compliance, at TPR said: “This case illustrates our commitment to protecting members and targeting our actions to have the most impact.”
He said that strong collaboration with the PPF and pension trustees and active dialogue with the new owner were decisive factors in achieving this rescue package.
He continued: “Members’ pensions are now more secure thanks to a new statutory employer, who has made a £7m lump sum payment into the scheme and agreed a recovery plan to help the scheme become fully funded in the next few years.”
Read the digital edition of IPE’s latest magazine
