TPR’s 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.”
TPR spotted restructuring activity by the owner of Northern Foods Limited and was concerned that members of its pension scheme could be negatively impacted. The sale of multiple businesses had weakened the strength of support for the pension scheme from the employer group, and the scheme had not received a fair share of the disposal proceeds. Details of how TPR intervened, supporting the pension trustee and helping to achieve a good outcome for members savers are outlined in a regulatory intervention report published today. TPR’s actions reflect its commitment to ensuring that defined benefit pension schemes are treated fairly during corporate refinancing or restructuring activities.
Background and regulatory action
In 2011, Northern Foods Limited (NFL) was acquired by Boparan Holdings Limited (BHL), a private company which also owned food processing businesses, the largest of which is 2 Sisters Food Group Limited, a major supplier of chicken products in the UK. The acquisition was financed by the issue of bonds. Between 2018 and 2020, several NFL businesses were sold to assist with the refinancing of BHL’s bond obligations. Despite generating over £400 million in proceeds from these disposals, NFPS only received a small share of the proceeds, although BHL issued a partial guarantee to reflect the reduced value of the direct covenant supporting the scheme following these sales.
TPR opened an avoidance case following the sale of NFL’s businesses. It was concerned about the weakening of the scheme’s direct covenant and 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 issued a warning notice under section 43 of the Pensions Act 2004, seeking formal financial support from BHL and an associated entity, Boparan Private Office Limited (BPO), together with several subsidiary companies of both entities.
Outcome
Following constructive engagement with BHL, BPO, and the scheme’s trustee, a joint support package was agreed:
2 Sisters Food Group Limited has replaced NFL as the scheme’s statutory employer.
Around £300 million 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.The scheme will receive 100% of disposal proceeds from one remaining NFL business and 30% from the other, if sold.
BPO has provided a significant unsecured guarantee for contributions due from BHL and the statutory employer.
The scheme’s section 75 deficit has reduced from approximately £1 billion in 2019 to £372.1 million at the end of March 2025. TPR 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.
|
