In 2006 the pension scheme was separated from Polestar, in an unusual and controversial move that allowed the group to remove a £141.7m liability from its balance sheet. In return, Polestar agreed to make payments totalling £45m over 12 years.
Last year the pension trustees allowed the group to defer payments totalling £2.5m, plus interest, into the scheme. This was due to be paid back by 1 March.
In the letter to pension scheme members, chairman Robert Matthews said: "Polestar recently informed the trustee that the business was in serious financial difficulties and would have to file for administration or be sold to Sun Capital. As soon as this transaction was completed all Polestar's unsecured debts, which included the payments to the scheme, would be written off."
Matthews said the trustees were left with two options: accept the £2.6m it was already owed, plus an additional £1m and forego any future payments; or accept £2.6m while maintaining its claim on future payments, in which case "the method of administration would mean that all payments to the scheme would automatically be written off."
"The trustee directors are deeply upset over the recent turn of events and are concerned about the anxiety and worry it will bring to the scheme's members." Matthews said in the letter.
Speaking to PrintWeek this morning about the new ownership of the company, Polestar chief executive Barry Hibbert said the sale of the business "had the full agreement of the [pension] trustees".
According to its latest accounts to 31 March 2010 the Polestar Pension Scheme had net assets of £371m and has 8,610 members, of which 4,103 are retired. At its last actuarial valuation on 31 March 2007 the scheme had a shortfall of £103m, since when its investments have suffered due to the global financial crisis. An up-to-date valuation is currently underway.
