Frank Field has said he is "baffled" by The Pensions Regulator's decision to drop its investigation into Johnston Press.
Yesterday the watchdog found no evidence the insolvency of the publishing company - which led to its defined benefit scheme entering assessment at the pensions lifeboat – was avoidable.
The publisher of the I and The Scotsman was acquired by JPI Media in November through a pre-pack deal, an insolvency procedure in which a company arranges to sell all or some of its assets to a buyer before appointing an administrator.
According to letters exchanged at the end of 2018 between Mr Field, chairman of the Work and Pensions select committee, and Oliver Morley, chief executive of the Pension Protection Fund, the deal was reached just two days before a pension deficit contribution of £800,000 was due to be paid to the scheme by the company.
Mr Field said: "This nasty little trick of 'pre-packs' being used to bundle up a company bankruptcy and quietly jettison the pension scheme into the PPF has long been on TPR’s radar."
He argued that the pensions lifeboat had raised the alarm about the Johnston Press pre-pack, as the company had some cash to put into the pension.
Mr Field added: "How TPR has decided there’s no avoidance case to answer is beyond baffling – and there’s no real indication in their report, nothing to explain away our and PPF’s deep concerns.
"We hear over and over of TPR’s new ‘clearer, quicker, tougher’ approach: what on earth happened this time?"
TPR has declined to comment.
In yesterday’s report, the watchdog stated it "found no evidence to suggest that insolvency was avoidable nor that the administration was planned to circumvent payment of the deficit repair contribution, nor that there were any acts pre-dating the administration worthy of further investigation".
But it said it has liaised with the administrator and the PPF "to ensure that should any new and relevant evidence be uncovered by them this will be provided to TPR," and this may lead to the regulator considering opening an investigation.
According to the pensions lifeboat, the Johnston Press Pension Plan has a deficit of £109m on a PPF basis, and £305m on a buy-out basis (the cost to secure all benefits with an insurance company).
The final salary scheme has 4,959 members and was closed to future accrual in 2010.
maria.espadinha@ft.com
