Polestar pensions crisis to hit 8,000 staff

More than 8,000 members of the pension scheme operated by Polestar – which has printed a string of famous magazines including Radio Times and Country Life – will today begin receiving letters detailing plans to wind it up in the new year.

The scheme's liabilities of nearly £900m will be taken on by the Pension Protection Fund, but the independent pensions consultant John Ralfe estimates that its funding position has weakened so much that the fund will be hit by a £300m loss.

The scheme's problems come from the fact that, when it was cut free from the financially troubled printer as a "zombie" scheme, Polestar had promised to inject £45m to help fill its funding shortfall. But the firm's financial problems continued and the scheme's trustees had to accept a fraction of that sum by selling to US private equity firm Sun Capital. That left them reliant on a high-risk, high-return investment plan to plug the deficit, rendered impossible after the markets plummeted in August.

As a result of the wind-up, more than half the scheme's members who still work will receive only 90 per cent of the pension they had expected and less protection from inflation than if the scheme were operating. Retired people will still be paid, but with less inflation-proofing.

Mr Ralfe is critical of how the Polestar situation has been allowed to deteriorate. He said the loss faced by the PPF – funded by contributions from existing pension schemes – would have been much less if the body had taken on the scheme in 2006 when it was cast off from Polestar.

"With £500m in assets, if Polestar had entered the PPF in December 2006, the hit would have been around £70m. The Pensions Regulator should be required to explain why it allowed the scheme to become [a] zombie relying on ultra-aggressive investment strategy of double or quits," he said.

The scheme trustees would not comment yesterday, but the Pensions Regulator's chief executive Bill Galvin said: "It is rare that the best option for a pension scheme will be separation from the sponsor. Where we have given clearance for such an event, it is because we have been convinced that insolvency of the sponsor is otherwise inevitable, and an alternative arrangement appears to deliver a better position."

Arts & Entertainment
Ricky Gervais at a screening of 'Muppets Most Wanted' in London last month
tvAs the second series of his divisive sitcom 'Derek' hits screens, the comedian on why he'll never bow to critics who habitually circle his work
News
news
Life & Style
Going down: Google's ambition to build an elevator into space isn't likely to be fulfilled any time soon
techTechnology giant’s scientists say there is no material strong enough for a cable from Earth into orbit
News
David Cameron sings a hymn during the enthronement service of The Most Rev Justin Welby as Archbishop of Canterbury, at Canterbury Cathedral last year
news
VIDEO
Life & Style
From long to Jong: Guy Pewsey outside Mo Nabbach’s M&M Hair Academy in west London before the haircut
fashionThe Independent heads to an Ealing hairdressers to try out the North Korean dictator's trademark do
Sport
Vito Mannone fails to keep out Samir Nasri's late strike
sportMan City 2 Sunderland 2: Keeper flaps at Nasri's late leveller, but Black Cat striker's two goals in 10 minutes had already done damage
Extras
indybest10 best smartphones
News
peopleRyan Gosling says yes, science says no. Take the A-list facial hair challenge
Arts & Entertainment
tvCreator Vince Gilligan sheds light on alternate endings
News
Paul Weller, aka the Modfather, performing at last year’s Isle of Wight Festival in Newport
people
Arts & Entertainment
Play It Forward: the DC Record Fair in Washington, US
musicIndependent music shops can offer a tempting alternative to downloads on Record Store Day
Sport
video
News
Supermarkets are running out of Easter Eggs
Deals make eggs cheaper than normal chocolate
Life & Style
Wasp factory: 1.3 million examples of the Vespa scooter have been sold in the last decade
motoringIconic Italian scooter still revving up millions of sales
Voices
voicesThe Ukip leader on why he's done nothing illegal
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Analyst - Financial services, Client data, LEI

£40000 - £50000 per annum + BONUS + BENEFITS: Harrington Starr: A leading, Cit...

Management Consultancy - Operational Research Analysts

£35000 - £50000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...

Corporate Actions Consultant - Market data, ISO15022, presales

£45000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: Corporate Acti...

Prudential Risk/Operational Risk Associate - London

£350 - £400 per day: Harrington Starr: An opportunity has arisen at a FCA regu...

Day In a Page

Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit
Westminster is awash with tales of young men being sexually harassed - but it's far from being just a problem in politics

Is sexual harassment a fact of gay life?

Westminster is awash with tales of young men being sexually harassed - but it's far from being just a problem in politics
Kim Jong-un's haircut: The Independent heads to Ealing to try out the dictator's do

Our journalist tries out Kim Jong-un's haircut

The North Korean embassy in London complained when M&M Hair Academy used Kim Jong-un's image in the window. Curious, Guy Pewsey heads to the hair salon and surrenders to the clippers
A History of the First World War in 100 moments: A forgotten naval victory in which even Nature played a part

A History of the First World War in 100 moments

A forgotten naval victory in which even Nature played a part
Vespa rides on with launch of Primavera: Iconic Italian scooter still revving up millions of sales

Vespa rides on with launch of the Primavera

The Vespa has been a style icon since the 1950s and the release this month of its latest model confirms it has lost little of its lustre
Record Store Day: Independent music shops can offer a tempting alternative to downloads

Record Store Day celebrates independent music shops

This Saturday sees a host of events around the country to champion the sellers of well-grooved wax
10 best smartphones

10 best smartphones

With a number of new smartphones on the market, we round up the best around, including some more established models
Homelessness: Why is the supported lodgings lifeline under threat?

Why is the supported lodgings lifeline under threat?

Zubairi Sentongo swapped poverty in Uganda for homelessness in Britain. But a YMCA scheme connected him with a couple offering warmth and shelter
A History of the First World War in 100 Moments: When the world’s biggest shed took over Regent’s Park

A History of the First World War in 100 Moments

When the world’s biggest shed took over Regent’s Park
The pain of IVF

The pain of IVF

As an Italian woman vows to keep the babies from someone else’s eggs, Julian Baggini ponders how the reality of childbirth is often messier than the natural ideal
Supersize art

Is big better? Britain's latest super-sized art

The Kelpies are the latest addition to a growing army of giant sculptures. But naysayers are asking what a pair of gigantic horse heads tells us about Falkirk?
James Dean: Back on the big screen

James Dean: Back on the big screen

As 'Rebel without a Cause' is re-released, Geoffrey Macnab reveals how its star perfected his moody act
Catch-22: How the cult classic was adapted for the stage

How a cult classic was adapted for the stage

More than half a century after it was published 'Catch-22' will make its British stage debut next week
10 best activity books for children

10 best activity books for children

Keep little ones busy this bank holiday with one of these creative, educational and fun books