The Pension Protection Fund aims to protect pensions – not management
By Nils Pratley
It looks terrible for the Pension Protection Fund (PPF): the pensions lifeboat fund is planning to vote against a restructuring of the UK arm of Toys R Us, an action that could mean 3,200 people lose their jobs. On the company’s proposal, only 800 employees would depart and the others would resume the fight against Amazon’s invasion of the toy market.
The PPF, however, is not to blame for this mess. Its hands are tied. The PPF’s jobis to look out for the interests of pensioners in Toys R Us’s defined benefit scheme and bargain accordingly. It has put forward a plan that looks more than reasonable: Toys R Us, as the price of support for its self-help plan, should put £9m into a pension fund that is showing a £30m deficit.
The company pleads it hasn’t got the money, a cry that raises many questions, most of them identified by Frank Field, the chairman of the work and pensions select committee. What on Earth was going on when the UK division of Toys R Us wrote off a £584m loan to the US parent, which has entered bankruptcy proceedings? And why was the UK managing director of Toys R Us being paid £1.3m last year?
Read full Op-Ed @The Guardian
