The Upper Tribunal has decided that it is reasonable for the Pensions Regulator to require companies from the corporate group of ITV to provide support for the Box Clever Group Pension Scheme. The scheme has 2,800 members and a funding deficit of around £115 million.
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 Group Pension Scheme. Prior to the collapse of Box Clever, ITV had extracted significant value from the joint venture.
The Regulator opened an investigation following Box Clever’s collapse. In 2011, it issued a determination notice outlining why it was reasonable to issue financial support directions (FSDs) to five companies that formed part of the ITV Group. A FSD requires its target to provide financial support to the scheme (for example, in the form of a parent company guarantee). ITV launched a legal challenge against the Regulator’s actions which was to be the start of several years of court proceedings.
Last week the Tribunal ruled that it is reasonable for the ITV group to provide financial support for the Scheme in the circumstances of this case. ITV has 14 days to seek permission to appeal the judgment. If there is no appeal, the Regulator will issue FSDs to those relevant companies in the ITV group.