THE Wedgwood Museum must wait until next month to discover whether it will be forced to sell its historic 10,000-piece collection to pay off pension fund debts.
As ATG reported in August last year,an extraordinary legal loophole meant that 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 to prevent companies from hiding assets from creditors, any company with links to a scheme – in this case the museum trust’s trading company – can be held responsible for its shortfall. As the museum trust trading company is the last fi rm linked to the scheme, creditors are chasing it for the entire shortfall.
However, in a three-day High Court hearing last week, the museum’s lawyers, representing the Attorney General, argued that the trading company was set up on the understanding that the collection would be retained under charitable trust for public benefit in perpetuity and so could not be disposed of as assets to pay off debts.
The case arose after 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 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 in 2009, the museum trust was deemed unassailable by creditors.
By Ivan Macquisten