The collapse of the UK arm of Toys R Us has meant the retailer's defined benefit (DB) pension scheme will be moved to the Pension Protection Fund (PPF).
Corporate recovery firm Moorfields has been appointed as administrator after UK's biggest toy retailer failed to find a buyer.
This means the Toys R Us Pension & Life Assurance Scheme – which has around 600 members and a deficit of £30m – has entered in a PPF assessment period.
Andy McKinnon, the PPF’s acting chief executive, said Toys R Us's collapse into administration was not unexpected but he said the pension lifeboat had protected against this outcome when it entered into a voluntary agreement with the retailer in December.
As part of the agreement Toys R Us agreed to pay £9.8m into scheme, composed of £3.8m in 2018, with a further £6m promised over 2019 and 2020.
Mr McKinnon said: "While this is a disappointing outcome, it is one we protected against in our approach to the CVA in December.
"The first of the additional payments secured by us has been paid; we believe therefore that the deficit in the pension scheme is lower than it would have been if the company had entered administration in December.
"We will now be working to maximise the recovery to the scheme from the administration. Members of the Toys R Us pension scheme can be reassured that the PPF is there to protect them."
Toys R Us filed for bankruptcy protection in the USA in September and announced in December it would be instigating a company voluntary arrangement (CVA), through which it will seek creditor approval to reposition its real estate portfolio.
Ian Browne, pension specialist at Old Mutual Wealth, said Toys R Us scheme members "need not panic".
He said: "When schemes collapse they fall into the hands of the PPF, who have the responsibility for paying workers’ pensions.
"Those who already reached the scheme’s normal pension age will receive 100 per cent of their pension. For those who haven’t reached the normal pension age, the PPF will pay 90 per cent of what their pension is worth, up to a cap.
"This cap is currently just over £38,500 per year for someone retiring at 65, so it only affects the highest earners."
But he said the retailer's collapse added "yet more pressure" on the government to deliver when it produces its white paper on the future security and sustainability of DB pension schemes.
The Department of Work & Pensions has been working on its white paper on DB schemes, which was first expected to be published in 2017, and then delayed to February 2018, and is now expected in the spring.
The paper, which follows a consultation launched in February last year into what needed to be done to ensure confidence and secure the future of these schemes, will consider the need to adapt the regulatory regime.