Pensions - Articles - Pension Protection Fund stands firm over Toys R Us case

 If no agreement is reached then 3,200 jobs in the UK could be lost and the Toys R Us Pension Scheme (the Scheme) will almost certainly enter the PPF with pension scheme members receiving lower benefits than they are currently entitled to.

 Stuart Price, Partner and Actuary at Quantum Advisory, explains why this firm stance by the PPF can be seen as a positive action: “Any financial burden on the PPF of new schemes entering the PPF is picked up by PPF levy payers, who are other defined benefit schemes in the UK.

 “By insisting that Toys R Us pay additional contributions into the Scheme now, the PPF are ensuring that if a CVA is reached then the Scheme is in a stronger position than they currently are. This outcome would then mitigate the financial burden on the PPF if the Scheme was to enter the PPF in the future.

 “To me, it looks like a game of Russian Roulette as, if the CVA does not happen and the Toys R Us Pension Scheme enters the PPF, then the PPF levy payers will pick up the cost anyhow.

 “Thursday’s decision will be interesting, but I do think the PPF needs to stand its ground as the outcome here could set a precedent in the future.”