TPR has rejected a proposal from the Reader’s Digest Association (RDA), the parent company of Reader’s Digest UK, to address the UK entity’s £125 million pension shortfall. Under the proposed agreement, based on an agreement with the scheme’s trustees and the PPF, RDA would have contributed £10.9 million to the pension scheme assets and would have transferred a one third equity stake in Reader’s Digest UK to the trustees. The fund would then have transferred to the PPF which would have subsequently taken over the equity stake. We understand that Reader’s Digest UK is “now reviewing its options in an attempt to find a solution”.

TPR’s rejection of the proposal implies that it believes further funds may become available to the scheme either by way of a section 75 debt payment from Reader’s Digest UK or by TPR using its anti-avoidance powers to issue a Financial Support Direction or a Contribution Notice.