Over 13,000 members of the Northern Foods Pension Scheme (NFPS) are set to benefit from a package secured by The Pensions Regulator (TPR), which aims to strengthen support for the scheme and help it achieve self-sufficiency over the next decade.

TPR previously intervened after restructuring activity by the owner of Northern Foods Limited raised concerns that members of its pension scheme could be negatively impacted.

Northern Foods Limited (NFL) was acquired in 2011 by Boparan Holdings Limited (BHL), a private company which also owned food processing businesses, the largest of which is 2 Sisters Food Group Limited.

Between 2018 and 2020, several NFL businesses were also sold to assist with the refinancing.

Although BHL issued a partial guarantee to reflect the reduced value of the direct covenant supporting the scheme following these sales, the NFPS only received a small share of the £400m in proceeds raised by these disposals.

TPR therefore opened an avoidance case over concerns that the scheme had not been treated fairly compared with other stakeholders, as it did not receive an equitable share of the proceeds from the business disposals between 2018 and 2020.

In July 2024, TPR also issued a warning notice, seeking formal financial support from BHL and an associated entity, Boparan Private Office Limited (BPO), together with several subsidiary companies of both entities.

Constructive engagement with BHL, BPO, and the scheme’s trustee has since secured a joint support package, which will see 2 Sisters Food Group Limited replace NFL as the scheme’s statutory employer.

In addition to this, around £300m in contributions will be paid by June 2034, aiming to get NFPS to full funding on a ‘low dependency’ funding basis.

BHL’s guarantee has been extended to cover all ongoing liabilities to NFPS, including the scheme’s full section 75 debt if that became due during the period. All material BHL subsidiaries have also provided guarantees.

This means that the scheme will receive 100 per cent of disposal proceeds from one remaining NFL business and 30 per cent from the other, if sold.

As part of the deal, BPO has also provided a significant unsecured guarantee for contributions due from BHL and the statutory employer.

The scheme’s section 75 deficit has reduced from approximately £1bn in 2019 to £372.1m at the end of March 2025, and TPR said that it believes the funding plan now in place offers a realistic path to self-sufficiency, with enhanced direct support and material contingent support available if needed.

Commenting on the case, TPR executive director of regulatory compliance, Gaucho Rasmussen, said: “We expect trustees and sponsoring employers to work together to protect their pension scheme and its members.

"Where corporate transactions take place and the pension scheme is impacted, it’s vital that the pension scheme is treated equitably compared with other stakeholders.

“We can and will use our enforcement powers to support a fair outcome for pension scheme members. This includes pursuing financial support from companies associated with the employers, including those outside the employer group.”

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