Johnston Press, publisher of the I and The Scotsman, is continuing to seek a solution for its pension scheme after the company was put up for sale.
The company 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.
Yesterday (11 October) the company's board announced that following a strategic review it would seek offers for the publisher to assess all strategic options to maximise value for its stakeholders.
But discussions about Johnston Press’ defined benefit (DB) scheme, which has 4,959 members and was closed to future accrual on 2010, are still ongoing after starting in June.
At the end of 2017 the Johnston Press Pension Plan had a deficit of £47.2m, a decrease from £67.7m in the previous year.
FTAdviser understands discussions are taking place with the UK pensions lifeboat, the Pension Protection Fund (PPF) about a potential Regulated Apportionment Arrangement (RAA).
An RAA is an arrangement that allows a financially troubled employer to detach itself from its liabilities in respect of a DB pension scheme. This usually results in the scheme's controlled entry into the PPF.
Alternatively, 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 which offers benefits lower than those of the old scheme but greater than PPF compensation.
This was the case with the British Steel Pension Scheme, which was the last RAA approved by The Pensions Regulator (TPR).
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.
A PPF spokesman said: "We can’t comment on the circumstances of individual companies. The PPF provides a valuable safety net for pension scheme members if an employer suffers an insolvency event. Members of the Johnston Press Pension Plan can be reassured that the PPF is there to protect them."
A TPR spokesperson said: "We are aware that the company has launched a formal sales process and we remain in discussions with the company and pension scheme trustees as we seek to secure the best possible outcome."