The UK Pensions Regulator has warned Smiths News, the country’s largest wholesaler of newspapers and magazines, that it could face a financial claim over the underfunded pension scheme of the collapsed firm Tuffnells Parcels Express.
The regulator informed Smiths News last week that it is considering a financial support direction (FSD), a mechanism empowering it to demand financial backing for an underfunded pension scheme, even without evidence of wrongdoing.
Smiths News, which owned Tuffnells Parcels Express for nearly six years from December 2014 to May 2020, faces scrutiny after Tuffnells entered administration in June 2023, leaving its pension scheme with a large deficit.
Smiths News also stated that other parties connected to Tuffnells are identified as potential targets in the warning notice.
The regulator can seek up to £3.5 million from the firms to help plug the funding hole. Shares in Smiths News fell 3 per cent in Monday morning trading.
The firm said: “The board is reviewing the warning notice with its advisers and will have an opportunity to make submissions to the Pensions Regulator in response.
“These will be considered by the Pensions Regulator’s case team and then referred to a determinations panel before any decision is made as to whether a financial support direction should be issued against Smiths News, and if so, in what form or for what value.”
It added: “The board maintains the view that Smiths News acted reasonably throughout its time as parent of Tuffnells and that it was an overall net contributor of funding to Tuffnells during its period of ownership.”
The regulator will review submissions from Smiths News and other connected parties before deciding if financial support needs to be put up.
Smiths News is the UK’s largest news wholesaler and describes itself as a “leading provider of early morning end-to-end supply chain solutions” on its website.
Smiths News has been delivering newspapers to retailers across the UK for more than 200 years on behalf of the major national and regional publishers.
The company adds that it delivers to more than 22,000 customers across England and Wales on a daily basis.