MNRPF welcomes new P&O security and contribution schedule
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The Merchant Navy Ratings Pension Fund has obtained an improved commitment from troubled employer P&O Ferries, leading to a smaller net deficit in the 2023 valuation of the unsegregated multi-employer scheme.
The fund’s trustee chair Doug Ross said MNRPF has secured “significantly enhanced commitment” from the ferry operator after “complex” negotiations. This includes “further security, to be held by the fund as protection in the event of default”.
Ross did not say what form this security takes. MNRPF previously had a guarantee over three of P&O’s ships to secure outstanding debt of about £146m.
As well as the new security, Ross added that there have been changes to the contributions of P&O.
“We have rescheduled the timing and amount of P&O Ferries’ future contributions to the fund to give greater certainty over future cashflows," he said.
Ross told members that “these improvements, along with other adjustments we have made to the valuation assumptions, have contributed to a much smaller net deficit than originally estimated”.
Similarly, in May last year, the trustees told members that a new agreement about future commitments had been reached with P&O after “intense and complex negotiations” which would be taken into account in the 2023 triennial valuation. It is not clear if this year’s commitments are the same as last year’s.
As at March 2022, the scheme was 98% funded, up from 96% a year earlier. MNRPF is a 'last man standing' scheme, which means other employers would have to make up for any pension deficit left by P&O were the company to leave the scheme or become insolvent. MNRPF could only access the Pension Protection Fund if the last employer became insolvent.
P&O Ferries made headlines in 2022 when it dismissed all 800 staff members via video call at no notice and without consultation, replacing them with low-paid international agency workers, citing its future viability. The operator is owned by logistics firm DP World, itself owned by the government of Dubai.
The MNRPF trustees declined to provide further comment. P&O Ferries has been contacted for comment.
