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Reader's Digest goes into administration

It has been revealed that the US parent company of the UK version of the Reader's Digest has placed the operation into administration today. This is a matter which we covered some weeks ago in relation to a £125 million pension fund deficit which the US parent company had been trying to resolve with UK pension trustees and the Pensions Regulator.

While a deal between the US parent company and the UK pension trustees was agreed this was immediately vetoed by the Pensions Regulator. As a consequence the US parent company had no alternative but to place the UK operation into administration with the potential loss of 117 jobs. The magazine itself was founded back in 1938, still has a subscriber base of over 500,000 people and will continue to trade as normal until a buyer is found.

This is yet another reflection of problems in the UK pension industry which have seen a number of conflicts between parent companies and pension trustees. While in this particular instance the parent company of Reader's Digest and the UK pension trustees were able to broker a deal, the Pensions Regulator stepped in and vetoed the agreement. The future of the UK arm of the Reader's Digest operation is now in serious doubt.

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