ITV loses eight-year battle over pension scheme deficit
19 Mar 2020
ITV has lost a long-running legal battle with The Pensions Regulator (TPR) and has been given six months to put in place financial support for a pension scheme with a deficit of around £115m
19 Mar 2020
The action relates to a company called Box Clever which was formed in 2000 as a joint venture between the TV rental businesses of Granada (now ITV) and Thorn (now Carmelite). Respective employees were transferred to the new company and enrolled in the Box Clever pension scheme.
Following the collapse of Box Clever, TPR opened an anti-avoidance investigation, saying that prior to its failure, ITV had extracted significant value from the joint venture.
TPR has imposed the deadline after the Supreme Court rejected ITV’s latest attempt to challenge TPR’s case that the company should support the pension scheme, which has around 2,800 members and a deficit of around £115m.
Last month, the Supreme Court refused ITV’s application for permission to appeal the Court of Appeal’s June 2019 judgment which upheld the May 2018 decision by the Upper Tribunal that financial support directions (FSDs) should be issued to ITV and the related entities in respect of the Box Clever scheme.
Erica Carroll, director of enforcement at TPR, said: ‘In a bid to avoid responsibility for the Box Clever scheme, ITV has used every possible legal channel to fight against our actions to safeguard the retirements of thousands of members.
‘Now they have exhausted the legal process we look forward to receiving a credible plan to support the scheme and its members. ITV could have resolved this matter years ago and we hope they will now want to seek a swift resolution and provide closure to the scheme’s 2,800 members.’
FSDs do not specify the form of financial support which should be put in place, so it is for ITV and the other targets to construct a proposal. TPR will then decide whether any proposal is reasonable in the circumstances of this scheme. For example, the company could assume responsibility for the employer’s liabilities to the scheme or make a lump sum cash payment into the scheme. If TPR considers that the proposal is reasonable it will issue a notice approving the arrangements.