Boots pension fund warning issued
Updated on 29 May 2007
Union leaders have sounded a warning about the pension fund of High Street giant Alliance Boots ahead of a shareholders' meeting to vote on a multi billion pound takeover.
Deputy chairman Stefano Pessina and private equity firm Kohlberg Kravis Roberts are offering over £11 billion for the company, formed last year after Boots merged with drugs wholesaler Alliance UniChem.
The GMB, which has warned of possible closures and job cuts, said the pension fund trustees must insist that enough money is paid into the fund to cover the full wind- up value of all the pension promises to employees and pensioner members.
National officer Paul Maloney said: "It is fanciful to think that the new owners of Boots, with borrowings of £8 billion, can be of any assistance to the pension fund if as a result of hard times in the future the company goes belly up.
"This is a fact of life that the trustees must face up to. GMB's Congress next week will consider a report on the extent to which private equity companies are linked to insolvent pension funds with massive unfunded liabilities which were passed over to the tax payer and other pension funds to make up.
"The Boots pension fund trustees cannot say that they have not been warned and if they have not studied the history of the private equity industry in this matter then they are being negligent.
"The pension fund trustees will have the full support of GMB in holding out for a sum of money that ensures that the members of the Boots pension fund do not lose out and other pension fund members do not have to bail them out."
Shareholders will meet in London on Thursday.
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