UK body seeks to reassure shipyard pensions holders over £85m deficit in scheme
A UK body set up to protect pensions in failed companies has moved to reassure former workers at Harland and Wolff over an £85 million debt in the scheme.
The massive pension deficit was considered a major obstacle in securing a buyer for the Belfast shipyard, prior to administrators from BDO Northern Ireland being called in during August 2019.
Energy firm Infrastrata completed the purchase of the business two weeks ago following a £3.3m payment. The London-based company is due to pay another £1.45m at the end of April 2020.
But while the sale was lauded for rescuing dozens of jobs at the iconic shipyard, a document released by the administrators has revealed the true extent of the debt of the Harland and Wolff pension scheme.
The most recent set of accounts published for Harland and Wolff Group plc for the year ending December 2016 indicate that the group's defined pension scheme had 2,633 pensioner and deferred members.
An update on the statement of affairs for the failed company, published by Companies House in recent days, revealed an £88.5m of debt owed to the creditors of Harland and Wolff Group plc, the biggest of which is the shipyard's pension scheme, at £84.6m.
Another £3.8m is owed to Dolphin Drilling ASA, owned by the former Norwegian owner of Harland and Wolff, Fred Olsen.
The document also listed the value of shares in the failed shipyard at just 10p.
Administrators BDO NI confirmed that had initiated transfer of the scheme into the care of the UK's Pension Protection Fund (PPF).
“This formed part of a planned process with the pension trustees, Pension Regulator and the PPF facilitating the sale of the remaining assets on a going concern basis,” said a BDO NI spokesperson.
Set up in 2005, the PPF was established as a statutory public corporation with the role of providing security to pension holders if their employer fails.
Speaking to the Irish News, a spokesperson said the fund will take between 18 and 24 months to assess the Harland and Wolff scheme.
But the PPF said members of the Harland and Wolff scheme could be reassured of the fund's protection.
“The PPF exists to protect members of UK defined benefit pensions when their employer fails and their scheme is unable to pay them what they were promised.
“If we didn't exist, members who had built up their valuable pension benefits would simply receive a share of what was left in their scheme when their company failed and in most cases would be substantially less than what the PPF provides.
“The PPF currently protects more than 250,000 people whose employers have failed and members of the Harland and Wolff scheme can be reassured of our protection,” said the spokesperson.