Wilko pensioners will see their savings cut after the defined benefit plan of the retailer collapsed and fell into the Pension Protection Fund.
According to PwC’s latest estimates, the deficit of the scheme with 2,000 members has increased to £76million on a buyout-basis, which is higher than the £50million initially estimated.
Wilko’s collapse, which is likely to result in the loss of most of its 12,000 employees, has raised concerns about the management of the Wilkinson Family, who have received more than £100,000,000 in dividends over the last 20 years. This includes £750,000 just last February.
The scheme will recover £20million from the security it has taken over a distribution center and other freehold property, but the remainder £56million will be regarded as an unsecured loan. The distributions to unsecured creditor are expected to be minimal. The PPF, a lifeboat backed by the industry, is ready to fill in a large part of the gap. The scheme will pay the full pension to members who reach retirement age. Those under this age are subjected to a 10% cut in benefits.
PPF stated: “Scheme Members can be assured that their benefits are protected at least to PPF levels.”
Lisa Wilkinson said she was saddened by the pension gap, but did not possess the “ability” to close it. “Surely, if I had the money to fund Wilko, I would have done so. Do I have more money than an average punter?” Probably. She said, “That’s not enough to finance a £1.3-billion business.”
The rescue plan led by HMV’s Doug Putman to save 200+ stores collapsed a week ago after he was unable to reduce the central costs and suppliers demanded upfront payment to resume deliveries.
B&M, Poundland and other discounters will take over 123 Wilko stores. The Range, a discounter, purchased Wilko’s brand and its website. CBRE has appointed property agents to sell Wilko’s last remaining stores.
Hilco, a distressed lender, will receive full repayment for the £40 million loan it extended to Wilko last January. Hilco will also reap the benefits of the liquidation fees for Wilko stock valued at £117.6million when the discount retailer collapsed.
Wilko has collapsed, owing £410.9million to suppliers, landlords, HMRC, and others.