Reader’s Digest on brink as rescue deal fails

Times Online February 1, 2010

Reader’s Digest in the UK, the staple reading matter in dentists’ waiting rooms for more than 70 years, was today on the brink of failure after a deal to rescue its sagging pension fund fell apart.

The Pensions Regulator in the UK rejected a proposal from the company’s US parent to inject £10.9 million and one-third of the UK business into the pension fund, which has a shortfall of around £125 million.

If the UK company were to fail, that would have serious implications for both the 135 employees in London and Swindon and the 1,600 members of its pension fund, whose retirement benefits might not be paid in full.

A spokesman for the US company Reader’s Digest Association (RDA) Inc said: “If a deal cannot be agreed between Reader’s Digest Association Inc and The Pensions Regulator, RDA Inc will not be able to continue its support for the UK company. If that is the case the directors of the UK business will have no choice but to file for administration.”

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