Thomas Cook's four defined benefit pension schemes will soon enter an assessment period with the Pension Protection Fund, after the travel operator entered liquidation.
The company collapsed after last-minute rescue talks failed, with the UK Civil Aviation Authority announcing today (September 23) that the tour operator had “ceased trading with immediate effect”.
Running hotels, resorts and airlines for 19m people a year in 16 countries, Thomas Cook was crippled with debt worth £1.7bn, mainly due to online competition and a changing travel market.
The 178-year-old company has four final salary schemes in the UK, which will now enter an assessment period at the pensions lifeboat to determine if they have enough money to pay pensions to their members.
The UK schemes, which were closed to accrual in 2011, had a surplus of £278m in 2018, according to Thomas Cook annual report.
This means the schemes probably won’t need to be absorbed by the pensions lifeboat, which pays 90 per cent of a scheme member's benefits if they have not reached the normal retirement age of the scheme when they are transferred into the pensions lifeboat.
But the holiday company was making deficit repayment contributions to the Thomas Cook Pension Plan of £28m a year until 2020, which will now be stopped.
A PPF spokesperson said: “Following the confirmation that Thomas Cook has entered administration we await notification that the associated schemes have entered PPF assessment.
"We want to assure members of Thomas Cook’s defined benefits pension schemes that their benefits remain protected by the PPF at what must be a very worrying time for all concerned."
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