McColl’s pension trustees urge bidders to protect member benefits

The trustees of the McColl’s pension schemes have urged any potential bidders to respect the pension promises made to members and to not seek to break the link between the schemes and the company, following news of the firm entering administration.

The firm has two pension schemes, the TM Pension Plan (TMPP), which has 915 members, and the TM Group Pension Scheme (TMGPS), which has 1,170 members.

McColl’s Retail Group appointed administrators today (6 May), putting around 16,000 jobs at risk.

The TMGPS is fully funded on a statutory ongoing funding basis and does not need any deficit recovery contributions, while the TMPP is expected to be fully funded on the same basis next year, at which point the current £1.75m annual deficit recovery contributions are expected to cease.

The TMGPS has a Section 75 deficit of less than £1m, while the TMPP has a Section 75 deficit of £15m.

Both schemes are fully funded on a Pension Protection Fund (PPF) basis, but will be subject to PPF assessment to establish whether the surplus funding is enough to buyout at benefits above PPF compensation levels.

“The trustees note that McColl’s Retail Group has appointed administrators, and are aware of reports that a number of bidders have expressed interest in acquiring the company,” commented a spokesperson for the trustee of the McColl’s pension schemes.

“The pension schemes are significant stakeholders in the company, and the trustees call on all potential bidders to make clear that they will respect the pension promises made to the 2,000 members by McColl’s and its subsidiaries, and will not seek to break the link between the schemes and the company.

“The two pension schemes are relatively small compared to the McColl’s business, and funding them would clearly be manageable for the ongoing business, or for anyone who acquires it.

"Breaking the link between the schemes and the sponsor company, by way of a pre-pack administration, would represent a serious breach of the pension promises made to staff who have served the business loyally over many years, and risks causing the schemes to enter the PPF with a resulting reduction in benefits.

“The trustees are continuing to liaise closely with The Pensions Regulator, to establish how best to protect scheme members. They will continue to work with stakeholders to protect members’ interests and will keep members updated.”

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