The move means some 4,500 of the scheme’s 8,610 members – those who are yet to retire – will receive a lower pension than anticipated.
When Polestar’s UK print businesses were acquired by Sun Capital Partners in April the group’s ongoing £45m pension liability was jettisoned in return for a one-off payment of £3.6m, causing controversy at the time.
Members of the scheme received a letter this week from the Trustee of the Polestar Pension Scheme explaining the latest turn of events.
The letter said that the Pensions Regulator believes the scheme should be wound up, as it is unlikely to be able to meet the cost of all the pension benefits due. This would result in it applying for entry to the Pension Protection Fund.
"The reasons for the worsening of the scheme's funding position are mainly due to Polestar UK Print's failure to meets its payment promise that was agreed in December 2006, and the scheme's funding position has more recently been affected by the recent worsening of global investment markets," trustee chairman Robert Matthews stated.
The Polestar Pension Scheme had a shortfall of £103m according to the most recent valuation.
Entry into the PPF has a number of potential outcomes for scheme members. Those who are already retired will continue to receive 100% of their pension, but with annual inflation increases capped at 2.5%.
Those yet to retire will only receive 90% of their expected pension entitlement, and this is subject to an annual cap of £29,897.
Polestar group finance director Peter Johnston told PrintWeek: "As we have no involvement in the administration of this Scheme, we are not in a position to comment. We would point out, however, that arrangements between the scheme and Polestar in April of this year were reached with the agreement of the scheme's trustees.
"As I'm sure you are aware the deterioration in investment markets worldwide are creating problems for most pension schemes. It is clearly unfortunate if the scheme is applying to enter the PPF but that body was set up by the government to provide protection in exactly these circumstances," Johnston added.
