We use cookies to support features like login and allow trusted media partners to analyse aggregated site usage.
To dismiss this message and allow cookies to be used, please click "Continue".



Twitter board

Follow us
  • Friday View: Piecing together the pooling puzzle- DGF Roundtable - Royal Mail names pensions boss -LGPS Central sel… https://t.co/DPfZ3WUv6K2 days ago
  • portfolio institutional is launching a new series on LGPS pooling, tracking changes to investment strategies and up… https://t.co/Ld04PZ2TNK4 days ago
  • Friday View: ESG: What lies beneath? - Industry backs DWP's ESG push - LGPS Central CEO to step down - Railpen hire… https://t.co/S3knBieob09 days ago
  • Out now- The portfolio institutional September issue feat our cover on ESG: What lies beneath? -Interview: Railpe… https://t.co/x9EYxDVXEl13 days ago
  • Friday View: LGPS pool appoints CIO - Jack Dromey on cost reporting - TPR hires former FCA director - NEST issues p… https://t.co/aNVGQqK35Z16 days ago
  • RT @AonRetirementUK: How prepared is your portfolio? Read a write-up of the discussions at our recent event with @portfolio_inst, along wit…18 days ago
  • "Shadow pensions minister Jack Dromey comments on the need to set compulsory standards for cost reporting." Read m… https://t.co/vH1gGZBm1q18 days ago
  • "Border to Coast, a recently launched £46bn public sector pension pool, has appointed Daniel Booth as its chief inv… https://t.co/AlIwikhgli19 days ago
  • Friday View: Spike in shareholder rebellions - Investors ditch GBP funds - Access launches first  pooled fund - GAM… https://t.co/aFzvBWgsmp23 days ago
  • Join us and HarbourVest Partners for breakfast to discover how access to private companies can provide diversificat… https://t.co/JaRlWiziJl23 days ago
  • "Ian Scott tells Mark Dunne about being back on the buy side, hedge funds, self-sufficiency, the trouble with infra… https://t.co/G0UUF9ldSx24 days ago
  • "Aon has developed an ESG rating system for buy-rated investment strategies which is designed to assess whether and… https://t.co/mstoAc3vr325 days ago
  • "With hedge fund performance improving and pension scheme investment increasing, has more institutional backing res… https://t.co/JVcIEXXKwr30 days ago
  • "The infrastructure repair bill is huge and more and more pension funds are willing to step in and plug the funding… https://t.co/zXy2lbpj6K31 days ago
  • "For investors looking to own sustainable businesses, engagement is the new divestment." Read more here:… https://t.co/YiA28qc6BI32 days ago
  • "Thanks to climate change, pension scheme portfolios are in danger of overheating. So what are trustees doing to pr… https://t.co/8gND4lC1OZ33 days ago
  • RT @eVestment: With research claiming that companies with high #ESG standards make better #investments, are sustainable strategies on the v…37 days ago
  • "The revolution in how investors are assessing companies is gaining momentum. No longer considered niche, responsib… https://t.co/uFCHnMlOux37 days ago
  • Friday View: Beyond bonds: The future of LDI - Responsible investing: Just reward - Just buys DB adviser - Ex Railp… https://t.co/1suOFFSprA37 days ago
  • "An increasing number of pension schemes are adopting a more efficient way of investing." Read more in our in-dept… https://t.co/F6Y0e9DB5E37 days ago


PPF weighs in on CVA deals

PPF weighs in on CVA deals

Mona Dohle
Wednesday 13th June 2018

With a growing number of ailing high street chains in the UK considering company voluntary agreements (CVA), the Pension Protection Fund (PPF) has outlined when it would back such deals.

High street retailers in financial difficulty, including House of Fraser, Toys R’ Us Mothercare and fashion chain New Look have recently announced that they are considering CVA deals, an insolvency procedure whereby the company in debt reaches a voluntary agreement with its creditors on the repayment of debt over a set period of time.

While CVA’s can offer an opportunity for firms to restructure their debts and terminate property lease obligations or onerous supplier contracts, with the board and shareholders remaining in control of the company, the agreement has to be signed off by at least 75% of the creditors. In some cases, the pension scheme may be the firm’s biggest creditor.

CVA deals are also subject to approval by the PPF, the lifeboat for UK pension schemes, which will consider how the deal affects the companies’ pension scheme and whether the firm remains viable after closing the CVA deal.

Responding to the recent increase in CVA deals being sought, the PPF stressed again that it would only approve CVA deals if they offered a “significantly better return” to pension scheme members than a company liquidation or going into administration.

The PPF also factors in that the pension scheme should be treated equally and not face disadvantages compared to other creditors.

In line with recent criticisms from the British Property Federation (BPF), which argued that CVA’s were used as a cost-cutting exercise by retailers aiming at rent reductions, the PPF also flagged up that CVAs often only addressed issues around the cost of property, rather than the overall viability of the business.

Another factor to be considered are dividend payments, the PFF outlined that if the firm still paid dividends throughout that period, they should be proportionate to contributions made to its pension scheme.

The lifeboat has recently confirmed CVA deals for Toys R’ US and Mothercare, while proposals by House of Fraser and New Look are being assessed.

As of May 2018, the PPF covered 5,588 schemes with a total of £1.611bn in assets and £1.705bn in liabilities. Its deficit has increased from £81.2bn to £94bn month on month, largely due to falling gilt yields, with the funding level currently at 94.5%.


Leave your comment

View our comments policy

Please login or register with us to leave a comment. It's completely free!

Friday View

Friday View

Shareholder engagement: