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ITV given a six month deadline to support Box Clever pension scheme after losing legal battle

Ref: PN20-12

Issued: Tuesday 17 March 2020

ITV was today given six months to put in place financial support for the Box Clever pension scheme after losing its eight-year legal challenge against The Pensions Regulator (TPR).

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 £115 million.

TPR’s Determinations Panel has issued Financial Support Directions (FSDs) to ITV plc and four related entities which must now show how they will support the scheme.

Today’s action follows several years of complex legal challenges by ITV to fight TPR’s use of one of its anti-avoidance powers to protect savers in the scheme.

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 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.”

ITV now has six months to put in place reasonable financial support for the scheme, which needs to be approved by TPR.

Box Clever 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.

TPR opened an anti-avoidance investigation following the collapse of Box Clever. Prior to the collapse, ITV extracted significant value from the joint venture.

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.

Notes for editors

  1. In 2011, TPR issued a determination notice outlining why it was reasonable to issue FSDs to five companies that formed part of the ITV Group.
  2. An FSD requires its target to propose how they will financially support the scheme. For example, the target 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.
  3. ITV originally referred the case to the Upper Tribunal in January 2012 to challenge TPR’s determination to issue FSDs and began its further challenge of TPR’s ability to submit additional evidence in late 2013.
  4. A number of hearings followed, including an earlier appeal to the Court of Appeal (and an unsuccessful application for permission to appeal to the Supreme Court), before the Upper Tribunal found in TPR’s favour on the additional evidence challenge in 2016. ITV then made subsequent requests for permission to appeal.
  5. The substantive hearing before the Upper Tribunal took place in January 2018 with judgment issued in May 2018. The May 2019 hearing in the Court of Appeal dealt with the targets’ challenge of the Upper Tribunal’s May 2018 decision. Following the Court of Appeal judgment in June 2019 upholding the Upper Tribunal decision, the targets sought permission to appeal to the Supreme Court. This has now been refused.
  6. TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).

Press contacts

David Morley

Media Officer (DB)
pressoffice@tpr.gov.uk
01273 662091

Matt Adams

Media Relations Manager
pressoffice@tpr.gov.uk
01273 662086

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