The former owner of Wilko does not expect to plug the discount retailer’s estimated £70.2m pension black hole following its collapse.
Amalgamated Holdings Wilkinson Limited (AHWL), which is owned by the founding family, said in new documents that its directors, including the retailer’s former chair Lisa Wilkinson, “do not believe there is a liability for AHWL in respect to any [pension] deficit arising” after taking legal advice, The Financial Times reported.
The UK pensions regulator has been considering taking action against Wilko after it collapsed with the substantial pension shortfall last August. The retailer paid out £77m in dividends to investors during the decade leading up to its demise, although AHWL said it had not paid dividends itself.
AHWL was originally set up as the management vehicle for the owners of Wilko and its subsidiaries, with its principal activity to “develop and manage a diversified portfolio of business investments”.
The pensions watchdog has the power to pursue owners to plug pension gaps if their actions have put savings at risk.
In the documents, AHWL directors said “they have received no indication of an actual or potential claim arising from the process to date”.
It acknowledged that the regulator’s powers were “extensive” but it cited several reasons why it believed it was not liable, including that AHWL “has never been the sponsoring employer for the Wilko pension scheme” and “when periodically asked about dividends, as shareholder, the directors…expressed a view that pension contributions be prioritised over dividends”.
AHWL added that its directors had believed the scheme was “appropriately and properly funded” especially after the retailer was given security over £20m of Wilko property, and annual contributions increased from £4.75m to £8.4m from 2022.
Related Story
Wilko plunged into administration in August last year after several months of teetering on the brink.
The value retailer, which started life as a hardware store in Leicester in the 1930s, fell behind as rival chains including B&M, Poundland and The Range found success amid the cost-of-living crisis.
Its assets were snapped up by those competitors with B&M and Poundland acquiring a tranche of stores, while The Range bought the Wilko brand.
It has since reopened Wilko-branded stores, and The Range owner Chris Dawson told Retail Gazette in December that he planned to open up to 40 Wilko stores over the next year.
The Pension Protection Fund could bail out the Wilko pension scheme. It said the scheme “remains in assessment” and that it was “working closely with the scheme trustees to ensure the best outcome for members”.
The pension regulator told the FT it has engaged with “Wilko, the pension trustees, the administrators and the PPF to make sure members’ benefits are protected”.
Click here to sign up to Retail Gazette‘s free daily email newsletter
