Debit Consolidation Blog

HMV Group PLC have announced the sale of it Waterstone’s chain and it looks likely that they will need to use the money from the sale to fund pensions for its employees. The company has clarified that most of the bookshop chain’s pension obligations would not be taken from its £53million sale, but the deal will have to be cleared by the pensions regulator, and also pension trustees.

Partner of pension consultants Hymans Robertson, Clive Fortes has said that it is practically a certainty that the pensions regulator will force the company to use a sum of the money to boost its pension scheme. HMV have declined to comment on the number of its pension members who were employed at Waterstone’s, but at the moment they are looking at a pension deficit of £32.6million. This number could increase significantly after their triennial review is completed, which shows the valuation used to calculate pension payments. The outcome of the review is said to be available some time at the end of June this year, when the Waterstone’s sale is pushed through.

Do you have a private pension? Use our private pension calculator for full details on what you could be receiving.

There has been speculation that the deficit could be much higher than the accounting valuation, if other similar cases are anything to go by. Excluding pension liabilities from the total sale amount is also not unheard of, in many cases companies have closed funds to new members and defined benefit pensions are not often applicable.

Even though there are no new places available in pension schemes, HMV remain responsible for members approaching retirement and those already at state pension age or older. If there are any changes to the funding of the scheme, trustees could make claims against the company – seeking financial assurance that they will be sufficiently provided for when they go to claim their pensions. In certain circumstances they could demand a higher contribution to boost their funds.

HMV is now pressing ahead with the closing of forty stores across the UK, in a desperate attempt to stem their spiraling debt; it may also be considering selling its Canadian branches. The company currently does business through 296 shops on the high street, and has sold the Waterstones brand to Russian investment billionaire Alexander Mamut, for £53million.

For more information on what you could be earning from your pension use our pension calculator for guidance.
credit card payment
it business analyst job description

One Response to “Waterstone’s sale could subsidise HMV pension pot”