UK - The trustees of the £1bn pension fund of record giant EMI have failed to come to an agreement over scheme funding with the group's new private equity owner, Terra Firma.

The UK Pensions Regulator (TPR) told IPE today it has stepped in to mediate between the two parties.

According to a TPR spokeswoman, it is the trustees' legal responsibility to produce a funding plan, but this has to be agreed with the employer before it can be put into place.

Terra Firma bought EMI, the world's third largest music corporation, in May this year for £2.4bn, but until now the trustees of the EMI scheme have not been able to agree on a funding plan.

In a letter, published on the Internet, to scheme members on October 3, the trustees said they could not agree on the funding of the pension scheme, and had referred the matter to TPR.

"We are now negotiating with both parties because ideally they are supposed to come to agreement between themselves, but if they fail to do that the regulator has the power to put the funding plan in place for them," the TPR spokeswoman said.

However, she added they had not yet reached the stage where the regulator would need to make plans towards designing a funding plan itself.

"Terra Firma has said that they have a surplus calculated using the IAS19 accounting standards, but what needs to be considered under the scheme's specific funding requirements is a specific calculation for the scheme itself," the spokeswoman said.

The result of that specific calculation could then be a higher, or lower, level of funding than IAS19.

It is unclear why the EMI pension fund failed to come to an agreement on funding levels before Terra Firma took over the company.

No one at the pension fund was available for comment. The EMI press office did not reply to telephone calls.

According to TPR the worst case scenario would be if it had to use its anti avoidance powers.

"Generally speaking, if we thought that any company was trying to avoid its pensions liabilities, then we can step in and ask them to make payments in the scheme," said the spokeswoman.