The US-based group is currently under Chapter 11 bankruptcy protection in the US, but its emergence from this is dependent on the resolution of an excess of liabilities and assets of £125m in its UK pension fund.
The business had reached an agreement with the trustees of the fund to pay £10.9m in cash and one third of its shares to plug the deficit and subsequently transfer the scheme to the Pensions Protection Fund. However, the deal was rejected by the UK Pensions Regulator.
The company released a statement saying that "in light of this unusual and unexpected development, the RDA has filed a motion in the US Court in which it notes that, unless the pension deficit issue is resolved, it will no longer be able to support the UK business indefinitely and therefore, the UK business may need to file for administration".
The Pensions Regulator declined to comment on the specifics of the RDA case, but said that it would only clear any deal if it was "convinced that there is no better, alternative option for members and for the Pension Protection Fund."
The London-based UK business employs 135 staff, of which fewer than half are members of the pension scheme.
The company said that the pension issue does not affect any other subsidiaries.
Reader's Digest UK could face administration because of pension deficit
The Reader's Digest Association (RDA) has warned that its UK business could be put into administration "within weeks", following the rejection of a plan to fix its pension deficit.
