The Pensions Regulator has approved a proposal by Hoover Limited relating to is pension scheme.
As part of the plan, known as a regulated apportionment arrangement (RAA), the Hoover (1987) Pension Scheme, which has 7,500 members, will receive £60m from Hoover and is expected to transfer into the Pension Protection Fund.
The scheme will also receive ordinary shares representing a 33 per cent stake in Hoover.
Nicola Parish, TPR’s executive director of frontline regulation said: “We do not agree to these types of arrangements lightly but in this case we believe it is the right outcome for scheme members and the PPF.
“RAAs can also be a useful means to keep companies afloat and preserve jobs.
“This type of pension restructuring is rare, and will only be agreed in accordance with our published guidance, so that RAAs are not abused by businesses seeking to offload their pension liabilities.
“We insisted on clear and extensive evidence to show that Hoover would inevitably fall into insolvency without a restructuring of its pension arrangements.”
Hoover and HPS trustees have agreed the RAA, and the regulator granted clearance to the proposal.
The Pension Regulator only agreed to the RAA after ensuring that Hoover met its criteria designed to stop employers abusing the RAA mechanism.
These include that the scheme’s employer would have become insolvent within the coming 12 months if the RAA had not taken place.
This is the first RAA that TPR has approved this year and only the second in the last two years.
TPR is currently in the process of deciding whether to approve an RAA for Tata Steel’s UK business, which has been facing increasing problems with its pension scheme because of the funding deficit.