The government’s plans are intended to protect pensioners’ rights by forcing ailing companies to stand by their pension obligations. But IPs say if that happens troubled companies will be difficult to rescue through a sale because new owners would have to take on the pension liabilities.
The new pension rights, revealed by the government last week, came after an employee-backed campaign following the collapse of Cardiff-based steelmaker ASW where workers lost their pensions.
Under the new rules, employers are liable for pension schemes and will have to pay out with the help of new insurance provisions. The insurance is designed to protect 90% of the value of current workers pensions and the full value of retired members.
Jeremy Willmont, business recovery partner at Moore Stephens, said most insolvent companies’ pension schemes are in deficit and are usually the first thing to be wound up in an insolvent business.
‘The money people are prepared to pay for a business will be reduced and it will be harder to find buyers,’ he said.
Roger Oldfield, receiver of ASW Holdings, backed government proposals, but said the government must find a way to protect the purchaser from inheriting pension liabilities in the event of a sale.
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children