TPR reaches £255m settlement to safeguard DB scheme

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The Pensions Regulator has reached a £255m settlement with industrial thread manufacturer Coats Group to protect two of the company’s defined benefit schemes.

TPR first warned Coats in 2013 and 2014 it was considering making an order for the company to financially support three DB schemes sponsored by firms within the Coats corporate group.

Coats put payments to some shareholders from the sale of former investments on hold while TPR’s investigation continued, and has now agreed to make upfront payments totalling £255.5m into the two schemes: the Coats Pension Plan and the Brunel Holdings Pension Scheme.

Coats has also agreed to fully guarantee of the liabilities of the two schemes, effectively placing all the cash from the investment sales back in the schemes.

TPR is still in discussions with the third scheme, the Staveley Industries Retirement Benefits Scheme, and trustees have been made a “comparable” settlement offer to discontinue TPR’s anti-avoidance.work.

TPR executive director of frontline regulation Nicola Parish says: “This case is a great example of how even after warning notices have been served, TPR, the company and the trustees can work together to achieve a good outcome for members without the need to formally enforce our powers through the determinations panel.

“We will continue to take a commercially-minded and pragmatic approach when pursuing the use of our powers to achieve good outcomes for scheme members”.