Work and Pensions Committee chairman Frank Field has called on The Pensions Regulator to stop the “dumping” of the Bernard Matthews pension scheme into the Pension Protection Fund.
It follows news that the owner of Bernard Matthews, Rutland Partners, is planning on selling the turkey producer to the 2 Sisters Group but sources have said that it is not prepared to complete a transaction unless Bernard Matthews' pension deficit is taken on by the PPF.
Unnamed sources told Sky News that the PPF has confirmed that the scheme would be eligible to join the lifeboat fund. It also reported that the pension scheme has a deficit of approximately £16m with around 750 members, although this was not confirmed by Bernard Matthews’ current owner Rutland Partners.
Field told Sky News that the new employer must not be allowed to get away with “dumping the Bernard Matthews pension scheme into which workers have paid”.
"The Pensions Regulator needs to act robustly and quickly to stop such activities being mimicked by other asset buyers who wish to dump pension liabilities. We cannot have firms changing ownership at the price of pensions being dumped with the Pension Protection Fund - such dumping involves promises being broken, and the cuts in benefit that result,” he said.
According to Sky News, this set-up would allow for the sale of the majority of Bernard Matthews through a mechanism known as a pre-pack administration, where a buyer is lined up to take on the company’s assets, but without liabilities such as its pension deficit.
Under PPF rules, existing pensioners would not see their payments change but could see reductions to future increases, while members who are yet to retire will see their pay outs discounted by 10 per cent.
Accounts filed on Companies House for the financial year ending 28 June 2015 show that Bernard Matthews made an operating loss of £859,000.
A spokesperson for The Pensions Regulator said: “We are aware of the situation at Bernard Matthews and are in contact with the trustees and the PPF, but we cannot comment further at this stage.
“Where we become aware of a company insolvency, or that one might be imminent, we will consider the circumstances and if we identify risks to its pension scheme we may decide to investigate whether it is appropriate for us to use our powers to protect members’ interests.”
Rutland Partners and 2 Sisters Group declined to comment. The Pension Protection Fund has been asked to comment but is yet to respond.
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