On the go: The Pensions Regulator was right to seek to impose a financial support direction on ITV in relation to the Box Clever defined benefit pension scheme, according to a court judgement published on Friday.
The decision by the Upper Tribunal, which rules on the decisions made by the regulator’s determinations panel, means the regulator can now ask ITV to agree a strategy for topping up the scheme’s funding.
Box Clever was created as a joint venture merging the rental businesses of Granada (now ITV) and appliances company Thorn in 2000. It went into administration in 2003.
In the hearing, ITV had argued that because the entire saga had taken place before the Pensions Act 2004 established the regulator’s moral hazard powers, an FSD would be retrospective and therefore invalid.
The tribunal rejected this argument, noting that shareholders “retained an ongoing interest in the merged business with the possibility of further value being generated if the business was successful, but without having to bear any responsibility if the business, whose strategy they continued to determine, subsequently failed”.
Mike Birch, the regulator’s director of case management, said: "We are very pleased with this ruling, which sends a clear message to companies linked with defined benefit pension schemes that we will not hesitate to use our anti-avoidance powers where we believe it is reasonable for them to provide financial support. We will pursue these cases for as long as necessary to protect pension savers and the Pension Protection Fund.”
