Poultry firm’s pension scheme falls foul of Boparan takeover

A NEW report has claimed that employee pensions will be hit hard by the deal which saw the owner of Birmingham-based poultry group 2 Sisters, Ranjit Boparan, acquire stricken food processing giant Bernard Matthews.

The report to the Commons Work and Pensions Committee said the turkey giant’s pension deficit was approaching £20m but would receive just 1p in the pound.

Boparan Private Office (BPO) bought Bernard Matthews from private equity firm Rutland Partners last month.

The deal meant that 2,000 jobs were saved and secured creditors of the company including banks and directors are set to receive almost all of their money back.

The report, compiled by Professor Prem Sikka, of the University of Essex, said: “The Bernard Matthews Pension Fund, recording a published deficit of £17.5m – which is likely to have grown to £20m – is set to receive no more than 1p in the pound, or perhaps next to nothing.

“The administration strategy seems to have been carefully crafted to enable secured creditors and controllers of Bernard Matthews to extract maximum cash from the company and dump the pension scheme and other liabilities.

“No attention has been paid to the hardship caused to retired and existing employees.

“It is all too easy for companies, their directors and shareholders to extract cash and dump pension obligations to employees, leaving the Pension Protection Fund (PPF) or taxpayers to foot the bill, and effectively boost returns to corporate elites.”

BPO said current pension arrangements would not change as the pensions would simply transfer to the new owner of the business.

BPO said that since day one it had been public knowledge that former employees of Bernard Matthews yet the receive benefit, would receive 90% of the value of the value of their pension as it would have to be transferred to the government’s Pension Protection Fund.

It said these arrangements were put in place by the sellers of Bernard Matthews – private equity firm Rutland Partners – not Mr Boparan.

BPO said it had offered to buy the entire shareholding of Bernard Matthews – which included all assets and liabilities – including the pension liabilities – but this was rejected by Rutland Partners.

It said: “Mr Boparan has paid a substantial sum for a loss-making business. In addition, the investment required to turn the business around is also considerable.

“This underlines his contention that he was quite willing to take on all pension liabilities, the quantum of which is substantially less than the overall cost required to turnaround Bernard Matthews.”

It added that it respected the heritage of the Bernard Matthews brand and was building towards the Christmas rush, which could have been in jeopardy had the acquisition not taken place.

“We have a proven track record in turning around businesses and we aim to make Bernard Matthews great again,” it said.