Dawson International calls in administrators after inability to pay pension deficit

Textile firm Dawson International has called in administrators after it was unable to reduce its defined benefit (DB) pensions deficit said to be around £50m.

Administrators have been appointed to Dawson International its principal trading subsidiary Dawson International Trading and the intermediate UK holding company Dawson International Holdings (UK). However, the US business Dawson Forte will not be affected.

On 8 August, the organisation was served with Notices of a Determination of Contribution by the actuary of its DB pension plans, which meant it must meet its pension fund deficit. However, the company announced that it was unable to make good on the deficit.

According to David Bolton, chairman at Dawson International, the company has attempted to reduce its deficit over the last four years with payments of £4 million, while, at the same time, covering £5 million-worth of pension-related fees and levies. 

The firm also put forward a plan for its DB plans to enter the Pension Protection Fund (PPF) with the PPF assuming responsibility for the plans in return for a cash payment, loan note and equity stake in the firm. This proposal was rejected in July this year.

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Dawson International’s workforce has reduced in size over time from 1,200 to 200 employees. Its final salary pension scheme currently has around 60 active members contributing to it, with more than 3,500 deferred and pensioner members.

Read more articles on pension deficits.