Pension scheme problems threaten future of Reader's Digest UK

THE future of 72-year-old magazine Reader's Digest UK was under threat last night after the British edition collapsed into administration.

Embattled US parent Reader's Digest Association (RDA) said it was no longer able to support the UK title after a rescue deal for the firm's underfunded pension scheme fell through.

Administrators at Moore Stephens confirmed they were seeking a buyer for the title – which has a circulation of 465,028 in the UK – and would continue publishing the magazine in the meantime.

Last week's prize draw would also be paid out to winners, as the Reader's Digest prize fund is held in a trust, the administrator said. But the company said it was too early to comment on the future of the magazine's 117 UK staff.

The British edition, which costs 42 for a year's subscription, has a history dating back to 1938. It has offices in London's Canary Wharf and Swindon.

The title's failure means its UK pension fund, which has 1,600 members, may have to be bailed out by the Pension Protection Fund (PPF) lifeboat.

Reader's Digest UK called in administrators after it failed to secure regulatory backing for a funding deal for its pension scheme, which has a 125 million shortfall.

The UK Pensions Regulator ruled against proposals that would have seen the US parent inject 10.9m as a lump sum and one third of the equity of the UK business into the pension fund. This left the UK publisher unable to meet its pension obligations and RDA said it would therefore not be able to continue operations.

The group stressed the UK administration will not impact its other titles across the world.

The regulator declined to reveal the reasons behind its decision not to agree the deal.