The Kodak Pension Plan (KPP) is to launch a new defined benefit pension scheme for its members.
Almost all (92%) of the previous scheme’s members voted in favour of the establishment of the new plan, while less than 1% voted to enter the Pension Protection Fund (PPF) and 7% have yet to register to vote.
The trustees anticipate that the new pension will be launched in April 2014.
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Members who have voted to join the new scheme will stay with the current plan, receiving their current benefits, until the new scheme is launched, at which time they will be transferred into it.
Those members who voted to enter the PPF or have yet to vote will stay with the current plan. In April 2014, the current plan will start an assessment period, during which the plan will be prepared for expected entry into the PPF.
From the start of the assessment period, members who did not choose the new plan will receive benefits equal to the compensation provided by the PPF.
The Pensions Regulator and the PPF have been made aware of the decision of the KPP members to support the launch of the new scheme. The Pensions Regulator provided clearance for the transaction, which included the launch of a new plan in April 2014.
The KPP is able to offer its members the new scheme because of the settlement it reached with Eastman Kodak in September 2013.
The settlement involved the transfer of ownership of the personalised imaging and document imaging businesses to the KPP. The businesses are expected to deliver long-term cash flows to support the new plan’s obligations.
Steven Ross, independent chairman of the KPP, said: “Aquiring the profitable personalised imaging and document imaging businesses, which we have named Kodak Alaris, from Eastman Kodak, means that members who have voted for the new plan will avoid substantial loss of their pension benefits.
“In fact, all these members will receive 100% of the pension they are receiving or were expecting to receive under the old plan. This is substantially better than the compensation they would have received in the PPF.
“On behalf of the trustees, I would also like to extend my thanks to The Pensions Regulator and the PPF for working closely with us to reach this positive outcome and to the various professional advisers which guided the trustees through this complex procedure.”
Ben Harris, client relationship manager at Aon Hewitt and secretary to the trustee, added: “We have worked very closely with the trustees and the plan’s other professional advisers throughout this process.
“Gaining the Pension Protection Fund’s agreement to start the new Kodak Pension Plan after receiving such overwhelming member support for the trustees’ proposals, is the best possible outcome we could have hoped for at the start of this process.”