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Government and Pensions Regulator must investigate Allders Pension Fund - Burstow
January 28, 2005 7:59 PM
Sutton and Cheam MP, Paul Burstow, has called for a though investigation of the Allders pension fund following the news that the company has gone into administration. The company went into administration last Wednesday (26th January) having failed to find a buyer for the loss-making group.
Paul Burstow has spoken and written to Pensions Minister, Malcolm Wicks, urging him to use new powers under the Pension Act 2004 to fully investigate the way in which the owners of Allders parents company, Minerva, have acted.
From April 6th this year the Pension Act sets up a new 'super' regulator to protect the interests of pension fund members. The law also contains new 'moral hazard' powers which are intended to prevent companies from unfairly dumping their pension liabilities. These new powers are retrospective and go back to April 2004.
The 'moral hazard' powers mean that shareholders and directors of companies that deliberately make transactions that deprive their pension schemes of funding can be forced to compensate the scheme at a later date.
Mineva own 60% of the company that own Allders. They have used their ownership to acquire the Croydon store for redevelopment. The sale of the Croydon store took place last April. Allders parent company insists that they have no liability for any deficit on the pension fund.
The Allders Pension Fund has a deficit of £14 million, according to the latest accounts. This could rise to £60 - £75 million if the fund is wound-up. In these circumstances the deficit would be treated as any other debt.
Paul Burstow MP said:
"What Allders staff want to know is that they will have jobs to go to and pensions to look forward to. I have asked the Pensions Minister to make sure that the owners of Allders have not acted in any way that could have starved the pension fund.
"It is essential that the interests of pension fund members are protected. This is an important test of the new pension regulator and new 'moral hazard' laws.
"If the fund is wound-up and the company have no further responsibility then Allders staff may find themselves having to apply to the Government's financial assistance scheme. The problem is that the Government is only putting £20 million a year into the scheme and there are at least 60,000 people already queing up for a share!"
ENDS
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