Pensions - Articles - Toys R Us had made payment into PPF before collapse

 Stuart says: “While it’s never in anyone’s interests for a company and subsequent pension scheme to collapse, there is a positive to this bleak news. Since the news broke late last year that the toy giant was in trouble and talks with the Pensions Regulator and PPF began, Toys R Us has made a payment of £1.1million into the scheme that formed part of those discussions. Had the company entered administration before Christmas, this may not have happened. This payment will mean that the PPF are in a better position than they would have been and is of the benefit to all PPF levy payers i.e. companies that have a defined benefit pension scheme.

 “This payment will unfortunately not help members of the Toys R Us pension scheme so as well as employees losing their jobs, members of the pension scheme, will receive a lower pension that they were expecting.

 “With this and the recent Carillion case fresh in our minds, looking ahead, we do need to try and ensure defined benefit pension schemes are better funded. This could mean requiring employers to contribute at a much higher rate when they can afford it so that in the extreme event of the company becoming insolvent, the pension scheme is more likely to be well enough funded not to have to rely on the PPF and members receive their full pension entitlement.”