Prestige Wealth Solutions Dubai - Hoover Offloads Pension Scheme to Lifeboat Fund in 2017

Hoover, the household appliances company, has made an arrangement with TPR, the UK Pensions Regulator, to offload their main pension scheme into the United Kingdom lifeboat fund.

At Presitge Wealth Solutions Dubai, we received word that TPR had confirmed that it had given the RAA, regulated apportionment arrangement, to Hoover, as the company was on the verge of bankruptcy due to the funding of the scheme which was threatening them.

RAA are not common and have exceptionally strict guidelines that have to be met. Hoover met these guidelines and clearance was granted in April 2017 for Hoover to offload their main pension scheme to the country's lifeboat scheme to reduce the risk of them having to close their doors as a result.

The scheme is due to join the Pension Protection Fund (PPF) assessment before being transferred to the lifeboat scheme, as long as there is no appeal. Hoover has already been declared insolvent and members who are still employed will be experiencing a ten percent cut of their benefits moving forward as a result.

PWS Dubai identified that the trustees of the scheme had no choice but to agree to the RAA as no long term funding plan had been reached. The focus was to ensure employees receive a decent benefit, it will be more than they would receive through the insolvency process.

Hoovers fund was only funded by sixty three percent, which left a sizable shortfall and while their assets sit well over £335 billion, the liabilities are sitting at around £530 billion as of June 2015. The loss experienced by Hoover Limited over an eighteen month period was over £6.2 million and the remeasurment of pension liabilities sat at three times this amount, which would have resulted in sheer devastation for all involved.

Other RAA deals which have been agreed to or are in the agreement process are Tata Steel in the United Kingdom and Halcrow, an engineering firm.