The UK Pension Protection Fund has said it has “concerns” about the pre-pack administration deal offered to newly-formed news publisher JPI Media after the collapse of Johnston Press on Friday night.
JP debtholders who bought the firm through the new company agreed to wipe out 60 per cent of the Â£220m owed to them, extend the repayment date to 2023 and inject Â£35m of new money into the group.
The move is said to have secured jobs and the future of JPâ€™s more than 200 titles, which include the i paper, Scotsman and Yorkshire Post.
But, under the terms of the takeover deal, JPâ€™s defined benefit pension scheme will not pass over to JPI Media. As such, itÂ is expected that pension payments to 250 employees will be affected.
The defined benefit pension scheme has aÂ deficit of more than Â£40m,Â according to the Financial Times.
In a statement about the sale, which was announced on the weekend after the board put JP into administration, a PPF spokesperson said: â€œWe have concerns surrounding the details of this pre-pack administration.
â€œWe will continue to work working closely with the Pensions Regulator and the company administrator to ensure the best outcome for the PPF and our levy payers.
â€œWe want to reassure members of the Johnston Press pension plan that their benefits are protected by the PPF at what must be an unsettling time for them.â€�
The chairman of the Work and Pensions Select Committee has also raised questions about JP’s pensions following the companyâ€™s sale.
In his letter, Frank Field MP asked Pensions Regulator chief executive Lesley Titcomb for details of its discussions with the publisher.
He said he found it â€œdifficult to understandâ€� how JPI Media – a company formed by Johnston Press bondholders – could snap up the publisher â€œwithout taking any responsibility for its pension scheme.â€�
The independent MP also asked for an explanation of why no solution was found that did not involve JPâ€™s defined benefit pension scheme entering Pension Protection Fund assessment.
He added: â€œMight I ask whether, in the light of this and similar cases, you consider that adequate protections are in place to prevent schemes being dumped on the PPF, at cost to pensioners and levy-payers?â€�
JPI Media has said that employees will still be offered defined-contribution pensions.
A spokesperson for the Pensions Regulator said: â€œTogether with the Pension Protection Fund, we will be working with the administrators to understand the circumstances surrounding the sale and its implications for the Johnston Press pension plan and its members at this challenging time.
â€œOur role at this stage is to assess the terms of the sale of the business to ensure the pension scheme has been treated appropriately.
â€œWe continue to work closely with the scheme trustee and the PPF.â€�
Johnston Press has been contacted for a response to both the PPF’s and Frank Field’s statements.
Source: Digital Journalism