The Committee is publishing a letter from TPR regarding the
proposed takeover of GKN by Melrose ahead of the BEIS Committee's
evidence session on GKN tomorrow morning. The letter
expresses TPR’s concerns that “the increased leverage
involved in the proposed takeover by Melrose is likely to have a
detrimental impact on covenant.”
Rt Hon MP, Chair of the Committees,
said: “I think pensioners would be surprised to know that a
pension scheme could be offloaded to someone clearly less
equipped or inclined to support it without the Regulator having a
say. A proportionate, mandatory clearance check as we recommended
would be valuable in cases like this.
“Melrose claims an impeccable record in protecting pension
rights. The surest way to demonstrate its commitment in this
case would be to apply voluntarily for clearance”.
- · In the
December 2016 report of its Pension Protection Fund
and Pensions Regulator inquiry the Committee called
for TPR to have the power to exercise mandatory clearance of
corporate transactions that might have deleterious impact on
defined benefit pension schemes, along with “nuclear deterrent”
punitive fines for avoiding pension obligations. The Committee
reiterates its call for these measures to be included in the
long-awaited DB Pensions White Paper when it is finally
published.
