On the go: ITV has been given six months to fund the Box Clever pension scheme after it lost its eight-year legal challenge against the Pensions Regulator.
The watchdog imposed the six-month deadline on Tuesday after the Supreme Court rejected ITV’s appeal, which challenged the regulator’s case that the company should support the pension scheme.
TPR’s determinations panel has now issued ITV and four related entities with financial support directions, which must show how they will support the scheme.
In February, the Supreme Court refused ITV’s application for permission to appeal the Court of Appeal’s June 2019 judgment. This upheld the May 2018 decision by the Upper Tribunal that financial support directions should be issued to ITV and the related entities in respect of the Box Clever scheme.
Box Clever was a joint venture combining the rental businesses of ITV, known at the time as Granada, and Carmelite, previously known as Thorn. Its pension scheme has about 2,800 members and a deficit of £115m.
When the joint venture went ahead, employees were transferred to the new company and enrolled in the Box Clever pension scheme, which was set up to ensure that its members would continue to receive the same benefits as promised by their former schemes.
But TPR opened an anti-avoidance investigation following the collapse of Box Clever, and in 2011 it warned ITV that it was going to issue financial support directions to five companies that formed part of the ITV Group.
This was mainly because it thought ITV had extracted significant value from the venture before its collapse. But ITV did not agree and challenged the financial support directions before it was issued, and so started eight years worth of legal action.
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.”
Financial support directions do not specify the form of financial support that 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.
An ITV spokesperson said: “ITV notes the Supreme Court’s decision and looks forward to meeting TPR to take the matter forward.”
This article originally appeared on FTAdviser.com
