Kroll pledges early update on Allders pension fund fears

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The Independent Online

Around 2,500 current and former employees of Allders, the department store chain that was put into administration this week, have been reassured they will receive a clearer picture of what is to happen to their pensions as soon as next week.

Around 2,500 current and former employees of Allders, the department store chain that was put into administration this week, have been reassured they will receive a clearer picture of what is to happen to their pensions as soon as next week.

In a statement yesterday, Kroll, the administrators, said that addressing the problems with the company's pension fund - which has a £65m deficit and is now facing the possibility of being wound up - is at the top of their list of priorities.

Members of the scheme currently stand to lose up to 75 per cent of their pensions if the fund is wound up. Although some of this shortfall is likely to be picked up either by the Government's financial assistance scheme (FAS), or the privately funded pension protection fund (PPF), which opens its doors in April, there is still some uncertainty as to which safety net will come to the rescue.

The Government's FAS promises to restore as little as 20 or 30 per cent of the deficit, while the PPF would provide up to 90 per cent.

For the fund to qualify for the PPF, Allders will have to suffer a qualifying "insolvency event" after 6 April, and will also have to hold off any wind-up proceedings for the pension fund until then.

Ros Altmann, a Government pensions adviser, said that another company lining up to dump its liabilities on the PPF as soon as it opened its doors, could be bad news to members of final-salary schemes across the country. The necessary compensation is likely to be funded with a higher levy on healthier pension funds.

However, she conceded that with pension trustees bound to act in their members' best interests, they had no choice but to try to secure qualification for the better benefits of the PPF. She added that the decision by Minerva, the property group which owns 60 per cent of Allders, to put the company into administration as a means of skipping liability for the pension deficit was "immoral".

A spokeswoman for Minerva said the company was "deeply concerned" about its employees' pensions. "Equally, they've got to balance that with their duties to shareholders," she said.

Stuart Todd, of the Department of Work & Pensions, said: "The DWP is watching the Allders situation closely. But it's inappropriate for us to comment on the detailed situation."

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