Defined Benefit  

Johnston Press in talks to offload pension

Johnston Press in talks to offload pension

Johnston Press, publisher of the I and The Scotsman, is currently in discussions with The Pension's Regulator (TPR) about the future of its pension scheme, including the possibility of offloading its final salary plan into the pensions lifeboat.

The company confirmed yesterday (5 June) that a Regulated Apportionment Arrangement (RAA), which allows an employer to sever ties with its pension scheme, is “one of a number of potential strategic options” on the table.

An RAA is an arrangement that allows a financially troubled employer to detach itself from its liabilities in respect of a defined benefit pension scheme.

This will usually result in the scheme's controlled entry into the Pension Protection Fund (PPF).

Much more unusually, the scheme will be sufficiently funded to buy out members benefits above PPF levels; or members may be offered the opportunity to transfer to a new scheme that offers benefits lower than those of the old scheme, but greater than PPF compensation.

This was the case with the British Steel Pension Scheme, the last RAA to be approved by the regulator.

These agreements are very rare, since a series of conditions must be in place for it to come to force. For example, these typically require the company to be within 12 months of insolvency.

Johnston Press has been in talks with creditors and interested parties about restructuring or refinancing bonds worth £220m, which become due for repayment on 1 June 2019.

The Pension's Regulator's spokesperson confirmed the discussions with the publisher.

He said: “We are aware of the situation regarding Johnston Press and are in contact with the company and trustees ‎to understand any impact on the pension scheme.

“We will not comment further unless it becomes appropriate to do so.”

Johnston Press’ DB scheme has 4,959 members and was closed to future accrual on 2010.

At the end of 2017, the scheme had a deficit of £47.2m, a decrease from £67.7m in the previous year.

maria.espadinha@ft.com