ITV submits Box Clever pension scheme settlement offer to TPR

ITV has submitted an initial offer of £31m to The Pensions Regulator (TPR) to reach a settlement regarding its financial support of the Box Clever Group Pension Scheme.

In March, TPR gave ITV a six-month deadline to put in place financial support for the scheme, after it lost its legal challenge against the regulator at the Supreme Court in February 2020.

In its Interim Results 2020 Report, ITV stated that it believed its offer of £31m was “the best estimate at this time”.

ITV’s latest estimate of the scheme’s deficit was £110m, as at 30 April 2020, which was calculated on a buyout basis using membership data and benefits currently being provided in that scheme, and based on membership data as of February 2020.

ITV said that it would “strongly contest” any attempt to impose liability in an amount its directors “consider unreasonable”, due to the “significant number” of undecided issues around the payment of the financial support.

Commenting on the offer, a spokesperson for TPR said: “We have received a proposal from ITV plc for supporting the Box Clever pension scheme.

"This in response to our Determinations Panel issuing Financial Support Directions (FSDs) to ITV plc and four related entities in March 2020.

"We are assessing it and will respond to the company. We have nothing further to say about the proposal at the moment."

ITV's interim report also revealed that the funding level of ITV’s defined benefit (DB) schemes had increased from a deficit of £87m on 31 December 2019 to a surplus of £26m on 30 June 2020.

During the six-month period, ITV’s DB liabilities increased by £245m to £4.28bn, although this was offset by a £353m rise in scheme assets, to £4.25bn.

ITV’s £26m surplus figure also included a security asset of £63m from its unfunded scheme, which is held by the company as security for future unfunded pension payments to four former Granada executives.

A decrease in corporate bond yields increased liabilities, while a fall in gilt yields increased the value of its assets.

Around £29m of deficit funding payments were made during the six-month period.

In light of the Covid-19 pandemic, ITV agreed with its trustees to defer pension contributions of £15m from H1 2020 to 2022 onwards.

The latest triennial actuarial valuation calculated that the combined deficits of ITV’s DB schemes was £470m, as at 1 January 2017.

The trustees are in the process of undertaking its latest triennial valuation as at 1 January 2020, which is expected to be agreed during 2021.

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