Wilko

Yesterday Wilko finally went into administration and that means an uncertain future for Wilkinson’s  pensioners, deferred pensioners and the bulk of Wilko’s current workforce who are members of the People’s Pension.

At one point, pension liabilities were in excess of £210m, today they will probably below £150m. Assets will have fallen too but hopefully not as fast. The most recent accounts reported a £15m deficit and the scheme can expect to head to the PPF for assessment.

There’s a chance that an insurer will pay full benefits and there’s a chance that a white knight might be found to stand behind the scheme and allow it to stay out of the PPF without being bought out. The trustees may have some important decisions to take, in conjunction with the PPF and TPR.

This is the first test of the Pensions Regulator’s “new mindset” and I hope that we’ll see the Wilkinson pensioners and deferred pensioners well treated. It’s also the first high-profile since the announcement of the Mansion House Reforms. I hope that we will see innovation at work.

Wilkinson is not a pensions problem in the way that BHS was.  Though the Wilkinson family and other shareholders took dividends last year, they were not on the scale of the Green’s.  The business is in orderly decline, stores are staying open , buyers for most will no doubt be found.

But it is highly unlikely that a new purchaser will want to take on the pension liabilities. The PPF is in place for such a situation but I suspect that there is some incentive amongst the beneficiaries of the scheme , to avoid an haircut.

What emerges over the coming week from the current uncertainty is likely to define the future options of many similar small schemes. Fingers are crossed.