92%* of total liabilities vote in favour of the establishment of the new plan. An “oustanding” result.
It’s still not too late for members to choose the new plan
The members of the Kodak Pension Plan (KPP) have voted overwhelmingly for the launch of a new plan, in which they will all receive better benefits than those available from the Pension Protection Fund (PPF).
92% of total liabilities voted in favour of the establishment of the new plan. Under 1% of total liabilities voted to enter the PPF and 7% have yet to register a vote .
The Trustees anticipate that the new plan will be launched in April 2014. Members who have voted to join the new plan will stay with the current plan – receiving their current benefits – until the new plan is launched. They will then be transferred to the new plan.
Those members who voted to enter the PPF or have yet to vote will stay with the current plan. In April 2014 the current plan will start an assessment period, during which the plan will be prepared for expected entry into the PPF. From the start of the assessment period, members who did not choose the new plan will receive benefits equal to the compensation provided by the PPF.
The Pensions Regulator and the PPF have been made aware of the decision of the KPP members to support the launch of the new plan. The PPF has considered the voting statistics and the details of the new plan. The Pensions Regulator provided clearance for the transaction which included the potential launch of a new plan in April 2014.
Steven Ross, independent Chairman of the KPP, said;
“I am delighted that our members have decided so emphatically that the launch of a new plan is the best option for them under current circumstances.
“Acquiring the profitable and cash generative Personalised Imaging and Document Imaging businesses – which we have named Kodak Alaris – from Eastman Kodak means that members who have voted for the new plan will avoid substantial loss of their pension benefits. In fact, all these members will receive 100% of the pension they are receiving or were expecting to receive under the old plan. This is substantially better than the compensation they would have received in the PPF.
“On behalf of the Trustees, I would also like to extend my thanks to The Pensions Regulator and the PPF for working closely with us to reach this positive outcome and to the various professional advisers who guided the Trustees through this complex procedure”.
The new scheme
All members will receive 100% of the annual rate of pension they are receiving or expecting to receive under the old plan. Those members who are over their normal pension age in the KPP will also receive a one off increase to their pension income equal to 3% of any pension earned before 6 April 1997.
Although the PPF ‘safety net’ offers members of distressed schemes a good level of benefits, the Trustees of the KPP have managed to secure superior benefits for their members. In fact, all members who voted for the new plan will receive better benefits than from the PPF.
• None of these members will have their benefits capped as would be the case in the PPF
• None of these members will have their benefits cut to 90% as would have been the case for some members under the PPF
• Going forward, members pensions will rise in line with statutory increases – which are higher for some members than those that would be offered by the PPF but less than the current KPP
• Lump sum death benefit is protected (where applicable)
• As an added safeguard, the new plan will be eligible to enter into the PPF at a future date, should that be necessary
Those members who voted no or abstained will be transfered to the PPF. Unfortunately, those members under normal pension age will only receive 90% of expected pension income after any compensation cap applied by the PPF – which could reduce their potential income substantially.
The KPP is only able to offer its members the new plan because of the recent settlement it reached with Eastman Kodak.The settlement involved the transfer of ownership of the Personalized Imaging (PI) and Document Imaging (DI) businesses to the KPP (see Notes to Editors). The businesses are expected to deliver long term cash flows to support the new plan’s obligations. They are now part of Kodak Alaris, a company wholly owned by the KPP and totally independent of Eastman Kodak.