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Wedgwood Museum under threat after £134m pension shortfall

09 August 2010Written by ATG Reporter

AN extraordinary legal loophole threatens to decimate the unique collection of the award-winning Wedgwood Museum in Stoke-on-Trent.

Although the museum, set up as an independent charitable trust in 1962, has had nothing to do with the Waterford Wedgwood company for nearly 50 years, it is being held liable for a £134m shortfall in the company's pension scheme.

Waterford Wedgwood went into administration in January 2009. It was then sold on but, under the terms of the deal, the US buyer did not have to take on the obligations of the pension shortfall, leaving the massive hole in the pension fund.

The problem is that five of the museum's employees are members of the Waterford Wedgwood company pension scheme and, under a statutory instrument brought in by parliament in April 2008, any company with links to a scheme – in this case the museum trust's trading company – can be held responsible for its shortfall.

The statutory instrument was introduced to prevent companies from hiding assets from creditors, but it has had the unintended effect of drawing innocent 'bystanding' organisations such as the museum trust into its ambit.

The issue first came to light earlier this year, when the Waterford Wedgwood group applied for help to the Pension Protection Fund (PPF), which was set up to guarantee minimum levels of pension payments to members of eligible funds.

The PPF refused help to Waterford Wedgwood because, under the rules, it said Waterford Wedgwood should try to recover the shortfall from the museum's trading company.

That, in turn, meant that the Wedgwood Museum Trust was forced into administration, although the museum is operating as normal.

The irony for the five employees is that the very rules set up to protect their pension interests could end up costing them their jobs.

The museum, part-funded by the Heritage Lottery Fund and regulated by the Charity Commission, must wait until the autumn to hear its fate, when a High Court judge will determine whether the trust can be broken up and its assets sold off.

"That would be a disaster," said Tom Wedgwood, a direct descendant of the company's founder, Josiah.

"This is a unique collection spanning 250 years of Potteries history of world class standing."

The news comes only months after the completion of an £8m redevelopment at the museum, which won a £100,000 Art Fund award last year.

The bulk of the collection was donated by the Wedgwood family or the company, with donations going back decades. A significant consideration in setting up the museum trust in the early 1960s was to protect its assets in the event of the company going public at some time in the future.

Even when Waterford Wedgwood did go under last year, the museum trust was deemed unassailable by creditors.

By Ivan Macquisten

Written by

ATG Reporter

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