UK - Waterford Wedgewood's pension liabilities could be swept into the Pension Protection Fund (PPF) even if a buyer steps in to purchase the troubled company.
According to the company's annual report, the Waterford Wedgewood carries a combined pensions liability of €147.9m (US$198.2m), but the report does not break down the assets between the UK employees and employees in other countries.
"It might be that the purchaser will take on the pension," said Jo Ouvry, a spokeswoman at Deloitte, said. Deloitte has not yet done any analysis on the company's pension scheme.
But industry experts say that's an unlikely scenario.
"Anybody buying would be buying the assets…the factory, the Wedgewood name and they'd be buying stock," said John Ralfe, an independent pensions consultant. It is "unheard of" for a buyer to also pick up the liabilities, he said.
Ralfe estimates that Waterford's UK pension scheme will have an estimated deficit of at least £100m using an accounting measure mandated by the pension protection act, with the PPF likely to incur a loss of £50m.
"You occasionally get a white knight but it would be unusual unless there was a very good PR reason for it," said Lynda Whitney, actuary at Hewitt Associates.
PPF spokesman Paul Reynolds said the administrator had not approached the PPF.
While the UK employees will enjoy the safety net of the Pension Protection Fund, those in Ireland aren't offered similar recourses. It is unclear what will happen to the assets of Waterford Wedgewood's Irish employees in a buyer does not step in.
Ireland's Pensions Board, the country's pensions regulator, mandates that the pensions scheme first cover the cost of winding down the scheme, then voluntary contributions are paid out in addition to the pensions owed to retirees, said Andrew Nugent, assistant head of information at the Board. If there are funds left over, the trustees of the scheme will pay what it owed to employees who have not retired.
"People who have not retired may be in a more difficult position in Ireland than in the UK," said Whitney.
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