Interserve scheme members 'largely unaffected' by administration - TPR

Members of the Interserve pension schemes will be “largely unaffected” by the company falling into administration, according to The Pensions Regulator (TPR).

Replying to a letter from Work and Pensions Select Committee chair, Frank Field, TPR executive director of frontline regulation, Nicola Parish, stated that members of the Interserve schemes will be protected after Interserve Plc was sold to Interserve Group Limited (IGL).

In the letter, she wrote: “Retired members will continue to receive their benefits, active members will continue to accrue benefits and the schemes trustees will continue to govern the schemes in which all members’ benefits sit.”

Interserve was the only member of the Interserve group to go into administration, and its business and assets including its subsidiaries have been sold to IGL, which is owned by Interserve Plc’s lenders.

Parish continued: “The business and assets of Interserve Plc have been transferred to IGL and the pension schemes benefit from the support of an employer group with £500m less debt on the balance sheet.”

TPR also said that it was satisfied with the outcome achieved for the scheme members, revealing that deficit repair contributions had not been reduced and will remain at £15m per year, which will be paid “for four more years than provided for by the previous agreement”.

In December 2018, TPR announced that it was “working closely” with the Interserve trustees as the company sought a rescue plan after reporting debts of over £500m, with a deleveraging plan announced in February 2019.

Parish noted that the regulator has “leaned from past experience” that close engagement with schemes from an early stage was “crucial in securing a good outcome for members”.

She concluded: We will remain engaged with the schemes as regards finalisation of the current restructuring and will monitor the financial position of the business periodically as it endeavours to effect a turnaround.

“In addition we will continue to work closely with the trustees about their schemes' next valuation cycle and will continue to work closely with the trustees and their advisers to ensure the best possible outcome for pension scheme members.”

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