The trustees of the Kodak Pension Plan have written a letter to its 15,000 members announcing details of a new pension scheme they plan to establish as a result of the settlement agreement with the Eastman Kodak Company.

Last week, Eastman Kodak Company put together a proposal allowing it to emerge from Chapter 11 bankruptcy. The company’s personalised imaging and document imaging businesses transferred to UK retirees in a deal worth around $2.8bn (£1.8bn) conducted to settle $2.8bn in obligations that it had to UK retirees. Kodak will no longer be responsible for the KPP. Despite the deal, the trustees have announced that there will not be enough money available to sustain the KPP as it is, meaning that it will enter the PPF later this year. The trustees however stated that the benefits are not as generous as those offered by the current KPP plan.

The new plan if implemented, will ensure that all members will receive 100 per cent of the pension they are receiving or expecting to receive under the old plan. Members going into the PPF under the normal pension age will get 90 per cent of their current pension income, after any compensation cap has been applied. GMPs earned after 5 April 1988 will increase in line with inflation up to three per cent a year on reaching GMP age. Pensions earned between 6 April 1997 and 5 April 2005 increase in line with inflation up to 5 per cent a year. Lump sum death benefits are also protected under the new scheme.

Other policies in the new plan allow people to take their pension early before age 55 if ill, unlike members in the PPF.

In the letter addressed to members the trustees stated: “We can only start the new plan if the vast majority of members choose it, and vote for it. And you will only get these better benefits if you’re one of the members who votes for the new plan. We urge you to vote for the new plan. This is because it will give you and your family better benefits than the Pension Protection Fund. We strongly believe that the new plan is in your best interests.”

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