Investigation Needed into Boots Equity Takeover

June 11, 2007 12:00 AM

Today, Jenny Willott MP, a member of the Work and Pensions Select Committee, tabled a motion in Parliament with cross-party support, calling for a speedy settlement to secure the pensions of the 66,710 members of the Boots Pension Scheme and for an investigation into the powers pension fund trustees hold to protect their members.

The proposed acquisition of Alliance Boots by Kohlberg Kravis Roberts (KKR) represents the largest ever private equity deal in the UK. As yet, no agreement has been reached to secure funds from KKR to meet the Boot Pensions Scheme £305m deficits.

Commenting, Jenny said:

"I am deeply concerned about the welfare of the 66,710 members of the Boots Pension Scheme whose average pension is currently only just £4,300 per annum.

"Without a swift agreement from KKR to make-up the deficits in the Scheme and to provide appropriate security, these people could lose much of their hard earned savings.

"The Boots acquisition by KKR is a test case as to whether pension fund trustees hold sufficient powers to secure the pensions of all their members. It is looking increasingly doubtful.

"There seems to be a worrying link between private equity company takeovers and companies with under funded pension schemes. The Pension Protection Fund and Financial Assistance Scheme have more than their fair share.

"We need to have an urgent investigation into the powers that pension fund trustees hold so that, in any event, the hard earned savings of pension scheme members are always secure."

Jenny has tabled the following Early Day Motion along with supporting sponsors Kelvin Hopkins MP (Lab), Mike Penning MP (Con), Paul Holmes MP (LD), Anne Begg MP (Lab) and Greg Mulholland MP (LD).

Boots Pensions Scheme

notes the proposed acquisition of Alliance Boots by KKR; is concerned that the future of the Boots Pension Scheme has not yet been secured; urges KKR to reach a speedy settlement in relation to the Boots Pension Scheme to ensure that all 66,710 members of the Scheme can feel confident that they will continue to receive their full entitlements when they fall due; and urges this House to establish an investigation into the powers of pension fund trustees to protect the interests of their members where there is a significant weakening of the financial strength of the employer as a result of its acquisition by a highly leveraged company.

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