“The recent collapse of high street favourite Wilko has brought into sharp relief the vital importance of not only good corporate governance, but also good pensions governance.
“Despite many companies enjoying record pension scheme surpluses, it's impossible to ignore the fact that there are many schemes, Wilko included, still facing significant pension deficits. Wilko’s scheme is now facing a £16m deficit, a PPF bail out and the likely loss of some benefits for its almost 2,000 members.
“Looking at today's ONS insolvency stats, 248 compulsory liquidations have been recorded in July 2023, up 81% compared to a year ago – unfortunately, a perfect storm of stubbornly high inflation and interest rates, coupled with a complex macroeconomic environment, has not helped. When loss-making companies make financial decisions which could impact member outcomes, particularly when their pension schemes are also facing a deficit, it is crucial that trustees and other third party advisers are involved. While they may not be able to save a struggling business, they can go some way to ensure appropriate governance measures are followed. Wilko is not the first, and will not be the last business to fail, leaving the financial stability of both current and previous employees in limbo.”
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