Debenhams to enter PPF assessment period

Debenhams’ pension schemes will “automatically” enter into a Pension Protection Fund (PPF) assessment period, following the company voluntary agreements (CVA) proposed today (26 April).

Scheme members will receive the usual payments while they enter the assessment period, according to the PPF.

The firm has published the details to two CVA after administrators were appointed to Debenhams on 9 April after they failed to reach an agreement with lenders beyond the £200m agreed at the end of March.

A spokesperson for the Debenhams pension schemes said: “The trustees are aware that a CVA has now been proposed. The CVA does not seek to compromise or reduce the employer’s obligations to the schemes.

“As a result of the proposal of the CVA, the schemes will automatically enter into a PPF assessment period, until such a point that the CVA is approved by the company’s creditors.

"Members can be reassured that pensions will continue to be paid as usual during this period.”

Following administration, the trustees said the pension scheme will be “carrying on as usual”.

As part of the CVA, Debenhams stores will remain open for the rest of 2019, while up to 22 stores are expected to close in 2020.

Further store closures are expected to be announced “in due course”.

“The trustees have worked with our specialist advisers throughout this process, to ensure that members’ interests are taken into account, and we have consulted closely with The Pensions Regulator and the PPF at every stage,” a spokesperson added.

“We are in the process of writing to all members with detailed information about the CVA process, and we will continue to keep them informed.”

In order to become effective, the CVA proposal requires 75 per cent or more of creditor and 50 per cent of unconnected creditors votes in favour the deal at a creditor meeting on 9 May.

Lincoln Pensions managing director, Dan Mindel, said: “As with other recent high profile cases, the initial financial restructuring is an important first step in stabilising the business but the need to address the underlying operational challenges of these companies remains the key issue for the future of the schemes.

"CVAs are just a part of the “toolkit” available in formulating a solution in these situations.”

The groups UK stores declined by 7.4 per cent over the last half dues to weak industry footfall.

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