ITV sees DB surplus fall into £133m deficit amid scheme closure worries

ITV has seen its defined benefit pension schemes drop into a £133m deficit on an IAS accounting basis, having recorded a £86m surplus in its 2018 interim results.

According to its Q1 2019 results published today, 8 May, the group said that the deficit, recorded at £38m at 31 December 2018, had been gradually growing and was driven by the decrease in the discount rate and the fall in corporate bond yields.

It marks the third year in a row the scheme has swung into either a deficit or a surplus, having recorded at £83m deficit at the end of 2017.

According to its 2018 interim report, TV said that it would continue to make deficit funding contributions in line with its most recent actuarial valuation in order to eliminate the deficits in each section. It expects to pay deficit funding contributions of around £75m next year.

ITV owns a number of DB schemes that have been closed to new members since 2006 and to future accrual from 2017. In 2016, on acquisition of UTV Limited, the company took over the UTV DB scheme, which remains open to future accrual.

However, last month ITV revealed plans to close the UTV pension scheme, which at the time was branded a “sham” by officials at media and entertainment union, Bectu.

The union said that the closure could affect nearly a quarter of UTV employees, and leave each worker “at least £50,000 out of pocket over the course of their retirement”.

Bectu believed that the decision did not honour the terms and conditions offered to members when they began working for the company.

However, UTV said that the closure is necessary to be “fair to all its employees”.

Total ITV external revenue was recorded at £743m, down 4 per cent on Q1 2018 (£772m), while ITV broadcast and online revenue was down 7 per cent at £489m. Total advertising was also down 7 per cent.

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