Concerns over Kodak final salary pension scheme
Serious concerns have been raised over the future of the Kodak pension scheme, it has emerged.
The company’s UK pension scheme is deeply in deficit, and last year Kodak’s US parent company was forced to pledge to pump in £535 million over 10 years in order to make this good. As at the end of 2010, the UK pension scheme had a deficit of £442 million.
Now however there are fears that these payments could dry up if the parent company, Eastman Kodak, which has recently filed for bankruptcy, cannot make the payments, as is feared likely.
If the UK company, Kodak Ltd, also files for bankruptcy, then the final salary scheme will enter into the Pension Protection Fund (PPF). Having to prop up the Kodak pension scheme would be a major blow for the PPF, which is already stretched as other funds struggle to meet their commitments. This situation serves to highlight the problems facing final salary schemes, which are coming under increasing pressure, primarily due to increased longevity.
As many of the deferred members of the Kodak scheme are now based abroad, they may well consider transferrin g their benefits into the increasingly popular offshore pension schemes, QROPS (Qualifying Recognised Overseas Pension Scheme), which are HMRC approved, and offer significant tax advantages, in addition to removing concern as to whether final salary pension schemes will be able to honour their pension commitments. These offshore pension schemes are now so popular that they have already attracted over £800m in pension funds from the UK since their inception in 2006, and look set to be in the forefront of offshore pension planning for UK expatriates for many years to come.
I am a member of the troubled Kodak pension scheme and have been told I can transfer my pension pot to another fund . I am currently drawing a pension from Kodak and was contemplating moving abroad can you give me further details of how I can proceed