Defined Benefit  

Pension scheme enters lifeboat assessment

Pension scheme enters lifeboat assessment

The Kodak Pension Plan (No. 2), which has about 11,000 members, has entered assessment at the Pension Protection Fund.

The defined benefit scheme, which started negotiations with the PPF in September, announced at the time that it wouldn’t have enough money to pay out future benefits.

A PPF spokesperson confirmed that the scheme entered the assessment period on March 25.

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She said: "Members can be reassured that their benefits remain protected by us throughout this assessment period."

When Eastman Kodak filed for bankruptcy in 2012 in the US, the trustees of the old Kodak UK pension scheme (KPP2) made an agreement to buy a number of businesses from the company, which was approved by The Pensions Regulator and the PPF.

This included the photographic supplies businesses Kokak Alaris, which are trading successfully but will not produce sufficient returns in the longer term to meet the needs of the pension fund, currently £1.5bn.

Nigel Moore, chairman of the trustees of KPP2 said in September that while the scheme could continue to pay pensions at that time, things would "have to change in the future".

The latest move means for the 7,797 pensioners in 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, which is currently £39,000 at age 65.

In a newsletter to its members, the scheme trustees said they will step down on May 1 and will be replaced by Dalriada, an independent trustee company that is one of PPF’s specialist providers.

A representative of the firm had already been appointed to join the KKP2 joint trustee board in November.

As it enters PPF assessment, the scheme also has a new administrator, Barnett Waddingham, which was also appointed by the pensions lifeboat.