Gaucho Rasmussen: Where corporate transactions take place and the pension scheme is impacted, it’s vital that the pension scheme is treated equitably compared with other stakeholders
The Pensions Regulator (TPR) has published a regulatory intervention report detailing action it has taken with regards to the Northern Foods Pension Scheme (NFPS).
The regulatory intervention report, released today (4 December), said, following the 2011 bond-financed acquisition of Northern Foods by Boparan Holdings, the company that also owns 2 Sisters Food Group, several Northern Foods businesses were sold between 2018 and 2020 to help pay down Boparan's bond obligations.
It said, however, that despite generating over £400m in proceeds from these disposals, the NFPS only received a small share of the proceeds alongside a partial guarantee to reflect the reduced value of the direct covenant supporting the scheme following these sales.
TPR opened an avoidance case following the sale of Northern Foods' businesses. It was concerned about the weakening of the scheme's direct covenant and that the scheme had not been treated fairly compared with other stakeholders, as it did not receive an equitable share of the proceeds from the business disposals between 2018 and 2020.
In July 2024, TPR issued a warning notice under section 43 of the Pensions Act 2004, seeking formal financial support from Boparan Holdings and an associated entity, Boparan Private Office, together with several subsidiary companies of both entities.
The regulator said following engagement with Boparan Holdings and Boparan Private Office a joint support package was agreed – including measures such as 2 Sisters Food Group replacing Northern Foods as the scheme's sole statutory employer and a deal to pay around £300m in contributions by June 2034 in a bid to get NFPS to full funding on a low dependency funding basis.
In addition, the report said that Boparan Holdings guarantee has been extended to cover all ongoing liabilities to NFPS and all material BHL subsidiaries have also provided guarantees.
TPR said the scheme's section 75 deficit has reduced from approximately £1bn in 2019 to £372.1m at the end of March 2025 – adding it believed the funding plan now in place offered "a realistic path to self-sufficiency, with enhanced direct support and material contingent support available if needed".
TPR executive director of regulatory compliance Gaucho Rasmussen said: "We expect trustees and sponsoring employers to work together to protect their pension scheme and its members. Where corporate transactions take place and the pension scheme is impacted, it's vital that the pension scheme is treated equitably compared with other stakeholders.
"We can and will use our enforcement powers to support a fair outcome for pension scheme members. This includes pursuing financial support from companies associated with the employers, including those outside the employer group."
