The Pensions Regulator has revealed how the trustee of the Polestar Pension Scheme attempted to take “excessive investment risk” to secure members’ retirement benefits after the sponsoring employer went into administration.
In April Polestar UK Print Limited, the company which was supporting the pension scheme, went into administration. The regulator estimates that the scheme, which has 8,350 members, has a £529m deficit.
Following the administration, TPR says the trustee presented an ambitious 40-year plan to pay off the deficit.
The regulator says the plan was rejected in August because it would require “excessive investment risk” to be taken.
After taking independent financial advice, the trustee agreed with the regulator’s position and voluntarily decided to wind-up the scheme.
TPR executive director of defined-benefit regulation Stephen Soper says: “With no employer support, the funding gap between the scheme’s assets and liabilities could only be closed through taking excessive investment risk.
“This would not be in the best interests of the generality of members or PPF levy payers. We therefore believe that the trustees’ decision to wind up the scheme is the right one.”