Transferring the pensions saved the company, the finance director said
Yeovil leather firm Pittards has had its pension schemes accepted into the Government's Pension Protection Fund.
The safety net pays compensation to workers whose company pension is likely to fall short of funds to pay the expected level of benefits.
Pittards applied to the fund in 2006 when the £33m deficit on its pension schemes threatened the firm's future.
Finalising the process had taken four years because there were more than 2,000 members in the two schemes.
Finance director Jill Williams said transferring the pensions probably saved the company.
"I think the company would have had to close because we were technically insolvent at that point," she said.
"We had a balance sheet with a negative £17m balance on it and we just could not have continued had we not resolved the pension problem.
"For pensioners already in receipt of benefits no adjustments were made to the amount received but future increases were capped off.
"For deferred members who were not yet old enough to take their benefits there was a reduction of 10% in line with the PPF rules."
She said the announcement had no impact on the job security of the firm's 180 staff in Somerset.
Its most recent figures showed a pre-tax profit of £329,000 for the first half of this financial year.
Pittards has been tanning leather in Somerset since 1826.
It supplies leather for companies such as Adidas, Dents and Timex.