RSM TENON's COLLAPSE could potentially leave more than £600,000 of outstanding contributions to its defined contribution (DC) scheme unpaid as the payment competes with higher ranking debts, reports sister publication Professional Pensions.
The seventh largest accountancy firm in the country filed for administration yesterday after a failed attempt to sell the business to rival Baker Tilly.
However, once the firm entered administration, Baker Tilly agreed to purchase the underlying and debt-free businesses from RSM Tenon leaving the parent company facing liquidation. This will be finalised once the Baker Tilly partners vote on the deal late next week.
RSM Tenon's 2012 annual accounts, the latest available, revealed that despite paying £4m in 2011 and £2.6m in 2012 to its DC schemes, there were £636,000 of outstanding employer contributions to personal pensions for some of its staff.
The shortfall built up from £225,000 in 2010 and £368,000 in 2011.
Scottish Widows, which provides a group personal pension (GPP) to the firm, said it could not comment on the matter.
Administration was struck after RSM Tenon's main lender, Lloyds Banking Group, pulled the firm's financing facilities leaving it unable to continue. This leaves the bank, which coincidentally owns Scottish Widows, as the company's main secured creditor, with proceeds from the sale to Baker Tilly expected to cover the debt.
Any outstanding pension contributions rank as unsecured credit below the bank debt and in line with other potential creditors such as HM Revenue and Customs.
In light of the RSM Tenon's insolvency, it is not known how much of the £636,000 will be recovered.
Administrator Deloitte will begin any insolvency process while dealing with any potential sale of assets to Baker Tilly. Deloitte advised it would not comment until this was complete, which is expected in the coming weeks. RSM Tenon has yet to respond.
The Pensions Regulator (TPR) has the power to fine individual firms for not meeting contract-based DC payments. However, Nabarro partner Anne-Marie Winton has previously branded TPR's power as "pointless" if the employer does not have enough money in the first place.
She was referring to case involving company Elton Games and the Pensions Ombudsman (PO), in which the PO which ruled the games firm should pay the contributions it missed before it became insolvent, but only if it had sufficient funds (PP Online, 15 August).
At the time, a TPR spokeswoman said pension managers should refer to its code of practice Reporting Late Payments of Contributions to Personal Pensions.
This article is totally misleading and inaccurate. It's not good for staff who read this sort of thing at RSM, especially with the uncertainty they have faced over the last few weeks. These are administered under RSM Tenon Ltd, which is NOT under administration and trading as normal.
Posted by: Fact, 28 Aug 2013 | 18:20
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