TPR drops anti-avoidance investigation into Johnston Press

The Pensions Regulator (TPR) has decided to drop its anti-avoidance investigation into Johnston Press, having found no evidence it planned to avoid paying deficit repair contributions (DRC) after falling into administration last November.

The regulator said that the group had no “viable alternative” to enter into administration, and that the timing of the administration had not been “artificially engineered” to avoid a DRC of £885,000 into the Johnston Press Pension Plan.

In November, The Pensions Protection Fund (PPF) and the Work and Pensions Committee both expressed concerns of the Johnston press deal, after the pre-pack arrangement was made just 48 hours before a £855,000 payment was due into the pension scheme.

The administrators subsequently sold the business and the assets to JPI Media Group for £181m a day after it entered into administration.

The pension scheme is now set to enter the PPF with an estimated shortfall of £109m.

TPR said: “We found no evidence to suggest that insolvency was avoidable nor that the administration was planned to circumvent payment of the DRC, nor that there were any acts pre-dating the administration worthy of further investigation.

“The administrators have also confirmed to us that their enquiries have not established any previous transactions which might require further investigation by them.

“We have liaised with the administrator and the PPF to ensure that should any new and relevant evidence be uncovered by them this will be provided to TPR, and this may lead to us considering opening an investigation.”

The scheme, which had 4,771 members, had a buyout deficit of £305m as at 20 June 2018.

Trouble started for the firm the publisher after it raised £360m to repay existing debts, with repayment in full expected in June 2019.

However, trade deteriorated for the newspaper in March 2017 and it was unable to raise further funds from its stakeholders.

In July 2018, Johnston Press requested a regulated apportionment arrangement from TPR and the PPF, hoping to free themselves from their pension scheme, but it did not reach sufficient guidelines set by the PPF.

Previously, TPR came under fire from the Work and Pensions Committee, who said they did not understand the “apparent rush” to complete the pre-pack deal.

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