Pensions Regulator publishes Northern Foods intervention report

The Regulator has published a report of its intervention in the Northern Foods Pension Scheme to safeguard the benefits of more than 13,000 members after identifying serious concerns about the employer's ability to support the scheme.

After the acquisition of Northern Foods Ltd by Boparan Holdings Ltd in 2011, Northern Foods sold several businesses between 2018 and 2020. However, the Regulator was concerned that most of the sale proceeds were used to refinance group debt rather than strengthen the Scheme, leaving it exposed.

By 2016, Northen Foods had become the sole statutory employer, but its shrinking operations and reduced profitability weakened the covenant. Although partial guarantees were put in place, the Regulator judged them insufficient and issued a warning notice in July 2024, seeking stronger financial backing, having concluded that the Scheme had been treated unfairly compared to other stakeholders.

After negotiations, a comprehensive support package was agreed:

• Northern Foods was replaced by a stronger entity as the statutory employer.
• Approximately £300m in contributions will be paid into the scheme by 2034, targeting full funding on a low-dependency basis.
• Guarantees were extended to cover all liabilities, including section 75 debt, with support from Boparan Holdings subsidiaries.
• The Scheme secured rights to all of the proceeds from the sale of one smaller Northen Foods business and 30 per cent from a larger one if sold.

The Regulator considers that this intervention “significantly improved the Scheme's security and the likelihood that members will receive their full benefits”. It demonstrates the Regulator’s “willingness to act decisively where pension schemes are disadvantaged and to ensure that employers and connected parties provide fair and adequate support.”