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Toys R Us' UK future in doubt over pension scheme

  • Video report by ITV News Consumer Editor Chris Choi

The future of Toys R Us in the UK remains uncertain, with 3,200 jobs hanging in the balance after the pension lifeboat said it will not back the retailer's rescue plans unless it agrees to pay £9 million into its pension fund.

The Pension Protection Fund (PPF) has said it intends to vote against restructuring plans put forward by Toys R Us on Thursday - a move that could plunge the embattled chain into administration.

In 2016, Toys R Us lost £673 million before tax.

Under its restructuring plans, the retailer is seeking to renegotiate leases and close 26 shops, putting 800 jobs at risk.

The PPF is demanding that Toys R Us makes the £9 million payment to secure three years' worth of funding upfront for its defined salary staff pension scheme, which has a shortfall of between £25 million and £30 million.

But it is believed Toys R Us does not have enough cash to meet the PPF demands, yet it is thought that senior executives in the US are to to get multi-million dollar bonuses, leading to some to question the restructuring plans.

If the PPF does not back Toys R Us' plans, the organisation set up to protect pension holders could end up jeopardising the jobs of existing workers, triggering more uncertainty for employers.