The trustees of the McColl’s Pension Schemes have announced that the Wm Morrisons Supermarkets group has completed the rescue of its two schemes, which cater for its 2,000 members.
The move, which comes after Morrisons purchased the assets of the McColl’s Retail Group via a pre-pack administration on 9 May, means that the schemes have now formally exited their Pension Protection Fund (PPF) assessment periods.
Under the terms of the transaction, Alliance Property Holdings Limited, a subsidiary of Morrisons that now trades as McColl’s, will become the new sponsoring employer of the two schemes, taking full financial responsibility for members’ benefits.
The schemes’ members will also benefit from funding guarantees extended by the Morrisons group. The trustees will continue to oversee the operations of the schemes.
Rachel Croft, director at Independent Trustee Services and chair of trustees for the McColl’s Pension Schemes, said: “We are delighted to confirm that the scheme rescue has now completed. This is great news, and represents the best possible outcome for members following the insolvency of McColl’s.”
She said the trustees had been actively involved throughout to help secure the transaction.
The trustees were advised by Gowling WLG, RSM UK, and Hymans Robertson. Morrisons was advised by Ashurst and LCP.
Background
When McColl’s went into administration on 9 May, the joint administrators from PwC completed a sale of the business and assets of McColl’s to Morrisons group, McColl’s largest supplier.
The deal successfully transfered all 16,000 staff and more than 1,100 stores across the UK and included Morrisons agreeing to support McColl’s two pension schemes going forward.
Since the rescue of the two McColl’s pension schemes has now been confirmed by the PPF, the schemes – which have combined assets of £130m – will no longer be in the PPF assessment period and will be supported by Morrisons Group from 14 July onwards.
As the pension schemes have now been rescued, and members’ benefits secured, they do not need to have a claim on the insolvency estate of McColl’s. This means that the other creditors of McColl’s are also likely to receive a higher distribution than they would have done otherwise.
Minesh Rana, pensions director at PwC UK, said: “Scheme rescues like this are incredibly rare. Over the last two months the stakeholders and their advisers have worked collaboratively to agree how a rescue could be achieved and implemented.”
He added: “The McColl’s pension schemes were relatively well funded, providing a strong platform for the rescues.”
Read the digital edition of IPE’s latest magazine
No comments yet