Palmer & Harvey’s pension deficit is being assessed by the Pension Protection Fund (PPF) after it was revealed that it has more than doubled over the last decade to £80 million.
Around 2500 people were made redundant last week as P&H, one of the UK’s largest grocery suppliers, fell into administration. A further 900 jobs are now under threat.
Since its collapse, the PPF has been assessing whether its pension scheme will need support from the industry-funded scheme, which played a significant role in softening the blow to pensioners following BHS’s collapse.
The Daily Mail revealed that the deficit had risen to £80 million, reportedly rising more than £50 million since 2007 before the company was bought out and slumped more debt.
A source close to the matter suggested most of this deficit had been acquired of the past five years.
Work and Pensions Committee chairman Frank Field has written to the Pensions Regulator questioning whether a recovery plan had been laid out.
Field is reportedly also considering whether the regulator needs fresh powers to prevent shareholders plundering company’s cash reserves before their demise goes public.
“Companies pension schemes are being left vulnerable and falling into PPF while directors are walking off with huge sums of money before the crisis becomes public,” he said.
“We have to revamp the regulator, so they are given, and then use, the powers to say ‘we have a hold on that money’.”
A PPF spokesperson added: “We are aware that Palmer & Harvey has gone into administration.
“As a result, we expect that the pension scheme will enter the PPF assessment period, and members can be reassured that we are there to protect them.”
It was revealed last week that Palmer & Harvey’s parent company had been paying dividends of around £8 million a year to shareholders since 2009, despite wracking up losses of around £10 million every year except 2014.