Hoover looks to offload pension scheme, including a possible push into the pensions lifeboat

Hoover is mulling plans to hand its pension scheme over to the pensions lifeboat in an attempt to save its ailing finances.

There are almost 5,800 defined benefit pension schemes in operation across the UK, but around 4,200 of them are in deficit, dragging on many companies' finances.

Now, The Sunday Times has reported electronics firm Hoover has been in "intensive" talks with the Pensions Regulator and Pension Protection Fund (PPF) over its main final salary scheme, which has roughly 7,8000 members.

If the deal goes ahead as planned, the fund could be pushed into the PPF, which would result in a 10 per cent cut in fund values for members under retirement age but could ultimately stop the company going bust.

Hoover made a loss before tax of £6.2m on sales of £240.6m in the 18 months to June 2015, according to the Wales-based company's most recent set of accounts.

The rescue plan will cost the PPF approximately £250m. However, the Sunday newspaper reported the buyout deficit, which is the cost of a third party insuring members' benefits, is between £450m and £500m.

"We are committed to finding an outcome that is in the best interests of all the members of the scheme, current employees and the company," a Hoover spokesperson said.

A PPF spokesperson added: "We can't comment on the circumstances of this company. In the event of an insolvency event at a company with an eligible pension scheme, members can be reassured that we are there to protect them."

A Pensions Regulator spokesperson commented: "We do not comment on individual companies or pension schemes unless it is appropriate to do so."

The manufacturing firm is far from the only employer to find itself weighed down by a defined benefit pension. When retailer BHS collapsed into administration last April, its pension scheme was running a deficit worth £571m.

The Department for Work and Pensions is currently seeking feedback for its consultation into defined benefit pension schemes, which it opened last week. Proposals up for consideration include extending the Pension Regulator's powers to allow it to step in and support employers which are having problems keeping their scheme afloat, to separate pension schemes from ailing companies or to wind up schemes in specific circumstances.