Morrisons has agreed to rescue McColl’s pension schemes following its takeover of the convenience retailer.
As a result, the two pension schemes, which have combined assets of £130 million will be supported by the Big 4 grocer.
McColl’s, which was sold by joint administrators from PwC in May following it falling into administration, transferred all 16,000 of its staff and over 1,100 UK stores to Morrisons.
The Pension Protection Fund (PPF) confirmed the rescue was carried out by the trustees, Morrisons, the administrators and their respective advisors.
Members no longer need to claim on the insolvency estate of McColl’s following the pension funds rescue, meaning other creditors are likely to receive a higher distribution than they would have if the schemes had not been saved by Morrisons.
This deal has also secured greater pension benefits for 2,000 members.
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“At the time of the McColl’s administration, the deal negotiated by the administrators and Morrisons helped to ensure that the trading business survived, jobs were preserved and a foundation was set for the rescue of the pension schemes of McColl’s employees,” PwC UK pensions director, Minesh Rana said.
“Scheme rescues like this are incredibly rare; over the last two months the stakeholders and their advisors have worked collaboratively to agree how a rescue could be achieved and implemented.
“With current economic forecasts showing lower growth and costs rising, it’s possible more businesses will go into distress over the coming months. Historically in restructuring situations, the pension schemes of distressed companies often have significant deficits and this can result in the pension schemes ending up in the Pension Protection Fund.”
Rana added: “However, the recent improvement in gilt yields as well as cash contributions paid over many years has resulted in many pension schemes now showing smaller deficits or even a surplus. Therefore, companies in distress with well funded pension schemes could become more common, providing stakeholders with a greater range of options and solutions in relation to pension schemes in distress situations.
“Healthy collaboration, open communication channels and an engaged trustee board during times of distress can make a real difference in how deals are made.”
