ITV loses appeal to block Box Clever from pensions hearing
UK - Broadcaster ITV has lost its appeal to block Box Clever pension scheme from a tribunal hearing deliberating whether the company owes the scheme more than £60m (€70m).
The hearing, launched after the terrestrial broadcaster appealed the Pensions Regulator's Financial Support Directive in January, is now expected to proceed in 2013, with scheme trustees able to participate.
Box Clever, a joint venture set up in 2000 as part of the merger of television companies Grandana and Thorn, became insolvent three years later, leaving behind a deficit of approximately £62m.
ITV has previously denied any involvement in the scheme, saying it had no control over the increase of the shortfall.
Giles Orton, partner at Eversheds and representing the Box Clever trustees, told IPE the broadcaster had looked to bar Box Clever from the upper tribunal hearing, as it would cause a delay and increase costs.
"The trustee took the view that it was mainly tactical and that, broadly speaking, they wanted to stop us playing an effective role, as the trustee did before," he said.
"We do want to play an effective role because the trustees believe - particularly as some of their officers have first-hand experience of what happened at Box Clever - that they should be able to contribute, and the upper tribunal has upheld their application."
Orton said Box Clever was "a little surprised" by ITV's attempts to restrict their access to the tribunal.
"Ordinarily, the next step would see [the hearing] go back into private discussions as to what sort of support would be appropriate," Orton added.
"Because ITV has appealed, that part of the process has been put on hold. We move towards a hearing in front of the upper tribunal with the question of if there should be an FSD at all being aired again."
A spokeswoman for the Pensions Regulator added that it welcomed the ruling and said: "It is entirely appropriate that the trustees have the opportunity to represent themselves in the upper tribunal proceedings."
ITV did not respond to a request for comment.
Meanwhile, the ITV Pension Scheme has seen its pensions deficit increase by almost 20% year on year, with a £200m rise in assets failing to offset higher liabilities due to costs surrounding its longevity swap.
The £2.6bn defined benefit scheme last year agreed a £1.7bn longevity swap with Credit Suisse in an effort control its liabilities - with the most recent annual report, released yesterday, estimating female scheme members would live to be 90, with male employees reaching 87.
Addressing the £212m increase in assets under management, the report said: "The value of the assets of the ITV Pension Scheme […] increased during the year, driven by a strong performance by the bonds and swaps used for hedging interest and inflation risk."
It added that the returns had been affected by losses from equity investments, as well as the longevity swap, which saw the fund pay £65m to Credit Suisse.
Additionally, the company said it expected to contribute £71m towards deficit reduction measures, with nearly half the amount coming from previously agreed deficit funding contributions, with a further £5m payment stemming from ITV Group's inability to reduce the funding shortfall by at least £10m.
At the end of December last year, the scheme's deficit stood at £390m, up from £313m 12 months prior.