Around 11,000 members of the defined benefit (DB) Kodak Pension Plan 2 (KPP2) will probably end up in the UK pensions lifeboat because the fund won’t have enough money to pay future benefits.
When Eastman Kodak filed for bankruptcy in 2012 the KPP2 scheme was created for the company's UK employees and it became the owner of Kokak Alaris.
While the Kodak Alaris businesses, which make photographic supplies, are trading successfully, they will not produce sufficient returns in the longer term to meet the needs of the pension fund, which currently has a deficit of £1.5bn.
Nigel Moore, chairman of the trustees of KPP2 said that while the scheme could continue to pay pensions at the moment, "things will have to change in the future".
"The most likely outcome is that the plan will eventually move into the Pension Protection Fund," he said.
For the 7,797 pensioners of the scheme, their benefits will be paid in full by the pension lifeboat.
The 3,254 deferred members will receive 90 per cent of their benefits in the PPF, as long as they don’t breach the compensation cap, currently set at £35,257.
After Eastman Kodak filed for bankruptcy in the US, trustees of the old Kodak UK pension scheme – which would be moved to the pensions lifeboat - made an agreement to buy a number of businesses from the company, which was approved by TPR and PPF.
At the time it was believed these businesses would generate enough money to pay off some of the old scheme’s deficit, but not all of it.
The new scheme, KPP2, was set up and members of the old scheme where invited to join rather than moving to the PPF.
The new pension plan offered better benefits than the pensions lifeboat, but not as good as the old scheme, and members accounting for more than 90 per cent of the liabilities of the old scheme moved to KPP2.
The decision to move or not the current pension fund to the PPF is dependent on negotiations which are currently ongoing.
Mr Moore said Kodak Alaris had been asked to explore opportunities to sell some assets, if an attractive arrangement can be made.
He said: "If offers reflecting the true value of the business are not received, then ownership of Kodak Alaris will pass to the PPF who will manage the asset in the same way as other scheme assets that are acquired.
"The PPF is experienced in doing this, for example it inherited a very substantial shareholding in Harworth Estates which it has kept and subscribed for further shares since it took ownership."
The scheme trustees will continue to work with TPR and the PPF on this matter over the coming weeks and months, he added.
Oliver Morley, PPF’s chief executive, said the pensions lifeboat has worked closely with KPP2's trustees, their advisers and The Pensions Regulator (TPR) on the future of the scheme and will continue to do so.