The U.K.'s newly appointed pension regulator, David Norgrove, today gave the green light for struggling plan sponsors to dump pension liabilities on the newly formed Pension Protection Fund, so long as it helps the sponsoring company continue operations and maintain jobs. The PPF, launched last month, is the U.K.'s equivalent to the PBGC.
The action could be taken "where it was absolutely clear that a company will go under if it doesn't recast its capital structure," he told delegates at the annual conference of the National Association of Pension Funds in Manchester, England. However, the PPF should take an equity stake in the restructured sponsoring company to benefit from any recovery.
Putting pension liabilities onto the PPF is only likely to happen in a small number of cases and would be done reluctantly, he added.