Uniq plc Pension Scheme's withdrawal from Pension Protection Fund assessment is a shining example of what 'close and positive cooperation' between the pension trustee, sponsoring employer, regulator and lifeboat fund can achieve, according to the Pensions Regulator.
The trustee of the scheme confirmed on Friday that it had received it withdrawal notice from PPF assessment. Uniq plc's scheme and its 20,000 members had entered assessment in March 2011 as part of a complex restructuring exercise under the terms of a Regulated Apportionment Arrangement.
This involved the trustee taking effective control of 90% of the food manufacturer's shares and, in conjunction with the company management and the PPF, overseeing the sale of the business to Irish foods conglomerate Greencore plc in 2011.
As a result of this, an additional £101m was paid to the scheme. Lane Clark & Peacock, who acted as the trustee's actuarial advisors said this injection helped to secure a buy-in policy with insurers Rothesay Life that guarantees benefits at no less than PPF levels.
Today, the Pensions Regulator said this would become a buy out at the completion of the winding up process. It noted, however, that members would receive less than their full scheme benefits.
It also published a report setting out how it worked with other parties to find an answer to the scheme's funding problems that avoided employer insolvency and PPF entry.
The regulator's executive director for defined benefit regulation Stephen Soper said: 'The Uniq case is a good example of what close and positive cooperation between the pension trustee, sponsoring employer, regulator and PPF can achieve. The funding challenges had appeared intractable and threatened the solvency of the business. No recovery plan was possible without taking inappropriate investment risk.
'But, unusually, there were no senior creditors ahead of the pension scheme. The scheme was in the uncommon position of being the dominant creditor and effectively owner of the company.
'This paved the way for an innovative solution that enabled the scheme to maximise the value of its interest in the employer and for the company to be sold as a going concern - achieving benefit levels at least equal to PPF compensation and protecting PPF levy payers.'
For LCP, partner Aaron Punwani said the company was 'pleased' to have been able to help the scheme trustee achieve the best outcome for members in the circumstances.
'The Uniq case is unprecedented in both the speed at which it went through PPF assessment and the innovative solution developed to secure members' benefits with an insurance contract, with the active support of the PPF,' he added.