EM2020 Realisations Limited (formerly known as The Edinburgh Woollen Mill Limited), became insolvent in late 2020. <\/a><\/p>\nThis put the scheme at risk of having to transfer the Pension Protection Fund (PPF) or secured benefits with an insurer, or similar, which would likely have been in excess of PPF levels but below full benefits.<\/p>\n
Due to concerns about the circumstances leading up to the insolvency, TPR opened an enquiry and issued several statutory notices to gather evidence and consider whether to use its anti-avoidance powers. <\/p>\n
By mid-2021, it had gathered enough information to consider opening a formal anti-avoidance investigation.<\/p>\n
However, the new owner, Purepay Retail Limited, proposed a potential rescue of the scheme around the same time, eliminating the need for TPR to pursue a formal anti-avoidance case, which could have led to years of uncertainty for members.<\/p>\n
Instead, TPR was able to work with the PPF, the new employer and the pension scheme trustee to reach an agreement for Pureplay to become the scheme\u2019s statutory employer after it bought the business out of insolvency.<\/p>\n
As part of this, Purepay agreed to make a \u00a37m lump sum payment into the scheme and agreed a recovery plan to help the scheme become fully funded in the next few years.<\/p>\n
This means that the scheme is now funded above PPF funding level and is expected to achieve full funding on a low dependency basis within the next three to four years.<\/p>\n
TPR executive director of regulatory compliance, Gaucho Rasmussen, highlighted the case as an illustration of TPR’s commitment to protecting members and targeting its actions to have the most impact.<\/p>\n
\u201cStrong collaboration with the PPF and pension trustees and active dialogue with the new owner were decisive factors in achieving this rescue package,” he stated. <\/p>\n
“Members\u2019 pensions are now more secure thanks to a new statutory employer, who has made a \u00a37m lump sum payment into the scheme and agreed a recovery plan to help the scheme become fully funded in the next few years.<\/p>\n
\u201cTransparency between sponsoring employers and trustees is vital, especially when employers are facing financial difficulties.\u00a0<\/p>\n
“TPR\u00a0won\u2019t hesitate to take regulatory action, when necessary, but we welcome early dialogue with trustees and employers to resolve situations without needing to formally\u00a0engage our anti-avoidance powers.\u201d<\/p>\n
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