Broadcaster ITV has agreed in principle to let 2,800 Box Clever scheme members join the ITV Pension Scheme and get full pensions, including back payments to make up for reduced benefits they received while in the Pension Protection Fund for the past decade. The deal is contingent on a data cleanse not resulting in “materially increased” benefits, expected to last up to 12 months.

The Pensions Regulator announced the in-principle agreement with ITV on Thursday. If the transfer goes ahead as planned, TPR will cease its regulatory action against the broadcaster and associated entities. The transfer of liabilities into the ITV Pension Scheme is subject to the approval of the ITV Pension Scheme Trustee, according to ITV.  

“Following this long running case, we are glad that there is an expected settlement under which ITV will accept the Box Clever pension scheme members into the ITV scheme,” interim executive director of regulatory compliance at TPR, Mel Charles, said about the deal.  

“Today’s news illustrates how we will use our powers to protect savers and robustly pursue matters, through the courts if necessary, to reach a satisfactory resolution.”  

The agreement in principle comes after a dogged pursuit by TPR lasting 13 years. The regulator opened an anti-avoidance investigation in 2011, succeeded by an eight-year legal battle that only ended when the Supreme Court refused permission for ITV to appeal further in 2020. TPR issued financial support directives to ITV and associated entities in March the same year, setting a deadline of September 2020. Failing to reach an agreement, in May 2022 TPR sought contribution notices for the full buyout deficit of the scheme, estimated by TPR at that date to be £133m, which reduced to £76m as at 30 June this year. ITV previously offered £52m. 

ITV’s interim results, also published on Thursday, state that on 10 July, the broadcaster “agreed non-binding heads of terms” with TPR, the board of the PPF and the Box Clever trustees to take members into the ITV scheme and make back payments including interest, as well as agreeing a provision for estates of members who died in the PPF assessment period. ITV will also reimburse the PPF for “certain amounts it has lent to the trustee during the assessment period”. 

The broadcaster has also agreed non-binding heads of terms with the trustees of the ITV Pension Scheme, under which it will make a one-off cash payment of around £25m into the ITV Pension Scheme in 2025, and provide a surety bond to cover the value of transferred liabilities, until the earlier of 31 March 2027 or the completion of the next actuarial valuation.   

Box Clever was a joint venture formed in 1999 between TV rental businesses Granada, now ITV, and Thorn, now Carmelite. The JV collapsed in 2003, before the regulator was set up in April 2005, with ITV previously accusing TPR of trying to use its powers retrospectively. ITV also considered that it should not be liable in respect of the part of the deficit it said was the responsibility of the other joint venture partner, Thorn.  

The courts found TPR is entitled to take into account events which took place before the moral hazard regime existed. The regulator justified its actions saying that “prior to the collapse, ITV extracted significant value from the joint venture”. 

TPR said it will issue a regulatory intervention report about the Box Clever case in due course. 

The roughly £2.1bn ITV Pension Scheme had a surplus of £144m in December 2023 and a funding level of 106.3%. As well as this two-section DB scheme, ITV runs the £91m UTV Pension Scheme. The company has two asset-backed pension funding agreements with the trustees, the SDN pension funding partnership, set up in 2010 and due to end in 2031, and the London Television Centre pension funding partnership, set up in 2014.