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Administrators lift pension hopes for ex-Rok workers

Former Rok employees are hoping administrators will be able to fill at least part of a £90 million hole in their pension fund.

The housing contractor became the biggest casualty of the recession after it filed for administration in November, blaming its demise on government cuts and tough economic conditions.

More than 3,000 staff were made redundant, while 380 were able to move across to Mansell.

Rok’s administrators, from PriceWaterhouseCoopers, have published progress reports for the group covering the period from November 2010 to May 2011.

The reports detail pension claims of £90m, which they say “rank behind the claim of the bank and, on that basis, would not receive any distribution.”

The scheme may end up in the Pension Protection Fund, which could safeguard up to 90 per cent of employees’ entitlement.

The reports say that The Pensions Regulator could issue a financial support direction (FSD) after the High Court decision in the case of communications giant Nortel and investment bank Lehman Brothers in December, which said any FSD would now have to be treated as an expense of an administration, rather than an unsecured debt.

The FSD decision is being appealed in late July and the judgment will be known by November.

If it is upheld, the pension would be given priority over some other creditors, including secured ones such as banks. Unsecured creditors, such as subcontractors, are “unlikely” to get any distribution, the reports reaffirm.

The auditors say: “The outcome of this appeal will have a significant impact on the timing and quantum of distributions to all classes of creditor.”

H&V News reported last December that the collapse had left subcontractors owed a total of approximately £280m.