Debenhams’ creditors have passed a company voluntary arrangement allowing pensions to be paid as normal.
Pension stakeholders, landlords and other creditors voted "significantly above" the required threshold of 75 per cent on the board’s proposals to close 22 stores and force through rent cuts on others, as part of two CVA deals on the table.
The retailer has two defined benefit pension funds, the Debenhams Executive Pension Plan and the Debenhams Retirement Scheme, which both closed to future accrual in 2006. While the former is fully funded, the latter is currently undergoing recovery action.
When the two CVAs were originally proposed in April, a £200m refinancing deal was negotiated for the schemes. But the retirement scheme still entered an assessment period at the Pension Protection Fund.
During this time the PPF would determine if the scheme had sufficient assets to meet its protected liabilities, or if it would need to enter the pensions lifeboat fund, meaning members would face cuts to their pensions.
However now the deal has been voted through, as long as it is completed successfully the pension scheme is expected to exit the PPF’s assessment process.
A spokesman for the Debenhams Pension Schemes said: "The trustees welcome the news that Debenhams' creditors have voted in favour of the CVA.
"They hope that the CVA process will complete successfully and that it will facilitate a sustainable solution for Debenhams, which will ensure that the schemes are supported in the long term.
"As the trustees have made clear previously, all pensions will continue to be paid as normal during the CVA process. The trustees will continue to keep members informed of developments."
The CVA vote came only hours after it was announced that the administrators had rejected all takeover bids, failing to sell the chain.
This means that Debenhams is still owned by Celine, a consortium of the retailer's lenders.
Debenhams' executive chairman Terry Duddy said: "I am grateful to our suppliers, our pension stakeholders and our landlords who have overwhelmingly backed our store restructuring plans.
"We will continue to work to preserve as many stores and jobs as possible through this process. This is a further important step to give us the platform to deliver a turnaround."
amy.austin@ft.com
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