Pension crisis threat to jobs at magazine

The Reader's Digest magazine in Britain is at risk of collapsing into administration after a funding deal for its pension scheme failed.

Negotiations between its embattled US parent group Reader's Digest Association and the UK Pensions Regulator appeared to have broken down over an agreement for the British edition's pension fund.

The move is understood to leave the future of some 135 jobs hanging in the balance. There are 1,600 members of its pension scheme.

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The US firm announced it was delaying its emergence from Chapter 11 bankruptcy protection due to the pension situation in Britain.

It said funding plans had already been agreed by its UK arm and industry lifeboat the Pensions Protection Fund, but added that the Pensions Regulator had indicated it would not approve the deal.

It is understood that if a deal cannot be reached with the Pensions Regulator, US-based Reader's Digest will not be able to support the UK arm, leaving the British business with little choice but to call in administrators.

The US parent filed for bankruptcy protection last August after battling financial difficulties as it laboured under vast interest payments on a $2.2bn debt pile (1.4bn).

That has now been reduced to $500m (314.7m) under a restructuring plan, but it is having to cut liabilities to survive. It publishes 50 magazine editions.

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