Pensions Lawyer, Anne-Marie Winton, Partner at ARC Pensions Law:“The innovative Kodak restructuring appeared to be a rare pensions success story in a distress situation. However, securing scaled back members’ benefits in a new pension scheme, KPP2, did require the Alaris business supporting that scheme to be financially viable long-term. Unusually, the Alaris business was under the ownership of the pension trustees.
"Members were informed in late 2017 that it is likely that KPP2 will enter the Pension Protection Fund, as did the predecessor Kodak pension scheme. This triggered an enquiry by the Work and Pensions Committee into the circumstances of the original pensions restructuring deal signed off by The Pensions Regulator – in particular as to whether any lessons have been learned. TPR has written to the Committee robustly defending its decision-making, but acknowledging that it may need to commission external independent advice in future, rather than rely on professional advice provided to the trustees in a distress scenario.
“TPR reported that it had required ‘appropriate’ governance arrangements for KPP2 to be put in place, which it says helped it to remain actively involved in discussions with the trustees about the future of the scheme. It is worth noting, however, that these discussions could result in TPR using its statutory power to trigger the winding up of the scheme, providing it is in members’ interests to do so, even if this also causes the insolvency of the struggling sponsoring employer.”
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