Regulator responds to call for 'swift action' over UK media group sale
The UK’s Pensions Regulator (TPR) is investigating the bankruptcy of media company Johnston Press amid pressure from politicians over the fate of the company’s defined benefit (DB) pension scheme.
TPR did not have the power to stop the ‘pre-pack’ deal, it said in a response to influential MP Frank Field, who had raised concerns about the sale of Johnston Press after it was put into administration. This meant its DB scheme automatically entered the Pension Protection Fund’s (PPF) assessment period, with some members set to have their benefits reduced.
In a statement issued yesterday, Field, the chair of the UK parliament’s work and pensions committee, said: “The Pensions Regulator has promised to be quicker and tougher — now would be a good time to start.”
The politician had already challenged about the sale of Johnston Press and the offloading of the DB scheme, but followed up on this yesterday after “worrying details” about the circumstances of the sale had come to light.
For example, the PPF has said that it did not “understand why there was an apparent rush to complete the pre-pack administration” and that it had been led to believe that the publisher had “more than adequate cash reserves”, including to pay the next pension contribution of around £800,000 (€895,000) that was due on 18 November.
Commenting on this, Field yesterday said: “It doesn’t take a genius to work out that a company that dumps its pensions liabilities just days before it has to put £800,000 into the pension fund might be up to no good.
“It’s clear that the PPF, which is left to foot the bill, has serious doubts about this pre-pack deal.”
A spokesperson for TPR said it was looking closely at the circumstances of the Johnston Press pre-pack deal, including timing of the company sale.
However, pre-packs could happen at short notice and “it is not possible to launch an investigation into a pre-pack that has not taken place”.
“Regulating the process leading to a pre-pack is a matter for the other agencies,” added the spokesperson.
“Our role is to focus on a pre-pack’s impact on an employer’s pension scheme.”
TPR did not have the power to stop a pre-pack taking place, as there was no requirement for either it or the PPF to pre-approve it.