Stuart Price, is Partner and Actuary at Quantum Advisory, which has offices in Amersham, Birmingham, Bristol, Cardiff, and London. Quantum provides pension and employee benefits services to employers, scheme trustees and members.
For more information about Quantum Advisory, please visit: https://quantumadvisory.co.uk.
One of the biggest names on the high street, House of Fraser, has seemingly been saved from collapse after being bought by Mike Ashley. The Sports Direct mogul paid £90million for the struggling chain just hours after it went into administration, but experts are concerned what this means for the thousands of employees and former employees who have a pension with the department store.
Stuart Price, Partner and Actuary at Quantum Advisory in Cardiff, warns that members of the pension scheme are likely to face cuts to their pensions. Stuart says:
“As it stands, House of Fraser’s pension liabilities are lined up to enter the Pension Protection Fund (PPF) as the deal with Ashley was confirmed after administrators had been appointed and therefore he has no obligation to support the pension scheme. The PPF is a lifeboat scheme for underfunded schemes, where the sponsoring employer has gone into administration and generally pays less than members would have received had the sponsoring employer not failed. Entering the PPF is obviously not ideal, and certainly not fair on scheme members, but it is better than the alternative and potentially losing everything.
“Although there are similarities with BHS, the House of Fraser pension scheme is in a much stronger position with a reported surplus, and therefore has a good chance of being bought by an insurer with members getting better benefits than those from the PPF (but not as good as they would have been originally expecting). This is something that will be assessed by the PPF so in the meantime, members have no option but to wait to see what the outcome will be.”