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The UK pension regulator is investigating concerns that P&O Ferries has failed to pay a £146 million debt to its 20,000-member collective pension scheme.

The ferry company owes the bulk of the £1.25bn total deficit, but had not made any voluntary contributions, according to a High Court since its 2006 takeover by logistics giant DP World, which is largely owned by the ferry. Dubai Sovereign Wealth Fund. verdict in 2015.

P&O Ferries and its owner have come under intense criticism for their decision to lay off 800 crew members in the UK without notice on Thursday, in order to cut costs by replacing them with cheaper agency staff.

The ferry operator has lost £100m a year for the past two years and said its business was not “viable” with its current workforce structures. According to an internal email from the Financial Times, the new structure will cut staff costs by about 50 percent.

The losses were cushioned by DP World, which reported record results for 2021, with earnings before interest, taxes, depreciation and amortization rising 15 percent to $3.8 billion.

The PvdA wrote to The Pensions Regulator in January and called on the watchdog to investigate P&O’s unpaid contributions to the Merchant Navy Ratings Pension Fund.

Matt Rodda, secretary of shadow work and pensions, told parliament in June 2021 that the debt could cause “serious problems” for the fund, which has 20,000 members who work in a wide range of companies well beyond P&O.

On Friday, the Pension Supervisor confirmed to have received a letter from Rodda regarding the MNRPF.

“We are working closely with the MNRPF trustee in our role to protect pension plan savers,” the regulator said. “We are not making any further comment at this stage.”

The MNRPF scheme reported a deficit of £96 million at its latest valuation in 2020. As a last-man-standing multi-employer pension scheme, if a participating employer struggles to pay contributions, the knock-on effect is that other employers have to meet the standard contributions. About 100 employers participate in the scheme, but only about half of them are required to contribute.

P&O has put more than £80 million into the fund since 2016 and the outstanding shortfall has been covered by two of the ferry company’s vessels, according to a person briefed on the matter.

P&O does not want to respond to its pension obligations.

The scheme administrators said: “We are working with the pension regulator to support any investigation or action that would protect the interests of the fund, both with regard to the assurance of members’ benefits and the impact on other participating employers. .”

In 2018, the Pension Supervisor opened an investigation into the governance of the MNRPF and issued a warning the following year recommending that an independent trustee be appointed to the scheme due to numerous governance issues.

Additional reporting by Simeon Kerr in Dubai

This post Regulator Investigates Concerns Over P&O Ferries Pension Payments

was original published at “https://www.ft.com/content/dffbab03-fc8f-49fa-85c4-a87cab076aaa”