The Pensions Protection Fund has initiated an investigation into the pre-pack administration of estate agency Cluttons after its takeover left the fund with a £43m deficit, the Financial Times has reported.

Cluttons was purchased last week by RCapital after experiencing a considerable downfall in the high-end property market and struggling to fund its defined benefit pension scheme.

As a result of falling into the PPF, 300 members of the Cluttons pension scheme now face cuts of their retirement income, with up to 10 per cent for those not yet retired, it has been reported.

A PPF spokesperson told Pensions Age: “We can confirm that we’ve been made aware of the ‘pre-pack’ administration of Cluttons LLP and we will be taking our normal steps to investigate the circumstances behind this. In the meantime, members of the pension scheme can be reassured that we are there to protect them.”

Pre-packs have increasingly come under the spotlight in recent times with cases such as Bernard Matthews last year, which was investigated by the Pensions Regulator and PPF.

Bernard Matthews’ former owner Rutland Partners was recently found to have rejected a buyout that would have protected the company’s pension scheme and instead opted for a solution that ensured a greater return for the owner.

This type of takeover has also been critiqued for its lack of transparency and disregard of pension liabilities.

Cluttons is yet to respond to Pensions Age’s request for comment.

Share Story: