Pension lifeboat to step in after House of Fraser collapse

Pension lifeboat to step in after House of Fraser collapse

The pension lifeboat has said it is likely to step in and assess the House of Fraser scheme after the department store chain went into administration today.

Following its decision to go into administration, Sports Direct tycoon Mike Ashley stepped in to buy House of Fraser for £90m, but The Pensions Regulator (TPR) said it was too early to tell what this meant for the company’s two defined benefit (DB) schemes.

House of Fraser went into administration came after after C.banner International pulled out of investing £70m in the 169-year-old retailer.

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The retailer employs around 17,500 people including 11,500 concession staff and has two pension schemes which have a surplus of £97m and liabilities of £608m as of March this year.

Following House of Fraser’s decision to restructure and close down some of its stores in June of this year, the retailer entered discussions with TPR about its two DB schemes.

TPR has said it is in frequent contact with the trustees of House of Fraser’s pension schemes but it was too early to tell what Mr Ashley’s decision to buy the retailer meant for workers and their savings.

A TPR spokesperson: "We are monitoring the situation at this worrying time for staff.

"We remain in regular contact with the trustees of the pension schemes and the Pension Protection Fund (PPF) regarding the future position of the schemes."

In June this year House of Fraser decided to use company voluntary arrangements to overhaul the business by rescheduling its unsecured debts and trading itself out of debt.

CVAs usually trigger an assessment being made by the PPF but the fund said no assessment was carried out at that time because there was another employer involved in the schemes which had not gone insolvent - though the PPF would not reveal the identity of this other employer.

Following the administration and the buy out by Mr Ashley, who also owns Newcastle United, the PPF said it expected an assessment to be carried out on the department store’s pension schemes.

The PPF said it was awaiting formal confirmation that both employers associated with the House of Fraser, Beatties & Jenners Pension Scheme had gone into administration.

A PPF spokesperson said: "We are aware of the insolvency of House of Fraser and anticipate formally confirming the pension scheme has entered PPF assessment shortly.

"Members can be assured that the PPF is there to protect them."