Smiths News has been warned it could face a financial claim over the underfunded pension scheme of collapsed firm Tuffnells Parcels Express.
The UK Pensions Regulator told Smiths News at the end of last week it was considering issuing a so-called financial support direction against the firm, which would give it the power to require financial backing for an underfunded pension scheme, even where there has been no wrongdoing.
Smiths News, the UK’s largest wholesaler of newspapers and magazines, owned Tuffnells Parcels Express for nearly six years until May 2020, before Tuffnells called in administrators in June 2023, with its pension scheme left with a large deficit.
Smiths News said a number of other parties connected to Tuffnells are also identified in the warning notice as potential targets of the regulator’s powers.
The regulator can seek up to £3.5 million from the firms to help plug the funding hole in the Tuffnells pension scheme.
Shares in Smiths News fell 3% in Monday morning trading.
The firm said: “The board is reviewing the warning notice with its advisers and will have an opportunity to make submissions to the Pensions Regulator in response.
“These will be considered by the Pensions Regulator’s case team and then referred to a determinations panel before any decision is made as to whether a financial support direction should be issued against Smiths News, and if so, in what form or for what value.”
It added: “The board maintains the view that Smiths News acted reasonably throughout its time as parent of Tuffnells and that it was an overall net contributor of funding to Tuffnells during its period of ownership.”
