All members of the Box Clever pension scheme are expected to receive their pension benefits in full following an in principle deal agreed between The Pensions Regulator (TPR) and ITV.
TPR’s Interim Executive Director of Regulatory Compliance, Mel Charles said: “Following this long running case, we are glad that there is an expected settlement under which ITV will accept the Box Clever pension scheme members into the ITV scheme.
“Today’s news illustrates how we will use our powers to protect savers and robustly pursue matters, through the courts if necessary, to reach a satisfactory resolution.”
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 in 2011. Prior to the collapse, ITV extracted significant value from the joint venture. Following a lengthy legal battle, TPR issued Financial Support Directions (FSDs) to ITV and associated entities in 2020 requiring them to provide reasonable financial support for the Box Clever scheme. When agreement could not be reached, TPR issued further proceedings seeking a Contribution Notice for the scheme’s full buy-out deficit (most recently estimated as around £76 million).
The agreement in principle will see all of the 2,800 members (both ex Granada and ex Thorn) transferred to the ITV Pension Scheme. Members, who have been receiving benefits at Pension Protection Fund (PPF) levels since 2014, will now receive full scheme benefits and back payments.
Assuming the transfer goes ahead as planned TPR has agreed to cease its regulatory action against ITV and associated entities. This agreement is supported by both the trustees of the Box Clever scheme and the PPF.
Notes for editors
Under the proposed settlement, members of the Box Clever pension scheme will be transferred to the ITV scheme following completion of a data cleanse exercise, which could take up to 12 months to complete. ITV has certain termination rights if, after a data cleanse of the scheme benefits, the value of the liabilities which are expected to transfer to the ITV scheme has materially increased since the date of the settlement agreement. If ITV does not proceed with the transfer, TPR will be free to recommence regulatory proceedings. The parties are now working on documentation to be agreed, so that the proposed settlement becomes legally binding.
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. Following ITV’s legal challenges through the Upper Tribunal and Court of Appeal, the FSDs were issued in 2020. 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 liability 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.
TPR will issue a regulatory intervention report about this case in due course.
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
- 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
The PPF is a public corporation, set up by the Pensions Act 2004, and has been protecting members of eligible defined benefit (DB) pension schemes across the UK since 2005. The PPF is run by an independent Board and accountable to Parliament through the Secretary of State for the Department for Work and Pensions. It protects close to 9 million members belonging to more than 5,000 pension schemes. If an employer collapses and its DB pension scheme cannot pay members what they were promised, the PPF pays compensation for their lost pensions.
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