Harrods: There is only one pension-fund sale
Sunday 29 November 2009
Harrods, the upmarket London retailer owned by Mohamed al-Fayed, is mulling the sale of its £200 million pension fund in a buy-out deal.
Harrods is thought to be seeking to offload its pension obligations to more than 1,000 staff by selling the scheme to a specialist insurer. A so-called buy-in deal, where certain liabilities are insured rather than sold, is also being discussed.
The company recently brought forward the review of its pension fund to consider future funding options.
A spokesman for Harrods said: “Harrods is carrying out a statutory valuation of the fund, which is normal practice every three years. However, we are bringing this forward a little to make sure the company and the pension fund is protected. We are looking at a range of options for the fund.”
Harrods is believed to be in discussions with a number of firms to take over the running of the pension fund, including Edmund Truell’s Pension Corporation. A spokesman for Pension Corporation declined to comment.
The pension fund was nearly £20m in deficit at the end of January this year, according to accounts filed at Companies House in the summer, however, the shortfall is likely to have reduced as equity markets rallied from March.
In 2006, Harrods axed its final-salary pension scheme to new entrants, instead offering staff access to a less generous money-purchase scheme. At the time, the pension fund carried a deficit of around £106m, with the company saying the open scheme “presented an unacceptable future risk for its employees and the group”.
But in April 2006, Harrods committed to plug the shortfall by injecting £90m into the fund by 2016.
Should Harrods strike a deal on its pension fund it would signal the re-emergence of the pension buyout market, which has been largely closed during the past 12 months.
But recently the market has showed signs of life when Lucida, the private equity-backed insurer led by former Prudential chief executive Jonathan Bloomer, agreed a deal to insure £500m of pension liabilities held by the trustees of the Merchant Navy Officers Pension Fund.
- 1 What happens to your body when you give up sugar?
- 2 Licence fee: What is the BBC charge – and how will the changes affect you?
- 3 This is what the photographer has to say about the picture of a weasel riding a woodpecker
- 4 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Bill Clinton portrait features Monica Lewinsky reference, artist admits
Japanese island overrun with cats after population explodes
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
Pornhub turns masturbation into energy in bid to save the planet
The 'sex selfie stick' lets you FaceTime the inside of a vagina
New theory could prove how life began and disprove God
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
This is what it's like to be dead, according to a guy who died for a bit
Durham Free School: 'Creationism taught at' free school facing closure
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...