The sale of a Scottish newspaper company has raised questions for the U.K. pensions regulator following a trustee announcement that the new owner will not be taking responsibility for the pension fund.
Frank Field, member of Parliament and U.K. Work and Pensions Committee chairman, wrote Monday to The Pensions Regulator inquiring why Johnston Press PLC's defined benefit fund entered the Pension Protection Fund's assessment process despite the sale of the publisher to its bondholders, which formed a new company, JPI Media.
According to a Nov. 19 note from trustee Chairman Ian Forrest to participants of the Johnston Press Pension Plan, Glasgow, "the new owners have not taken over responsibility for the plan."
"We also want to reassure you that the plan will enter an assessment period for the purposes of the Pension Protection Fund in the next few days," the note read.
“The Pension Plan has entered the PPF assessment period and will eventually be accepted by the PPF. Frank Field, at the moment, is raising questions about the conduct of and the decisions made by the directors of Johnston Press,” Mr. Forrest said in an emailed comment. Mr. Forrest could not immediately provide the size of the plan and funding status.
A PPF spokeswoman confirmed the size of the fund's deficit will allow the lifeboat fund to pursue action to recover the benefits by securing insurance policies for the pension fund participants.
Mr. Field in his letter called on the regulator to explain why JPI Media was able to acquire the publisher without taking responsibility for the pension fund.
"In particular, it would be helpful to have an explanation of why it was not possible to find a solution that would have avoided the pension scheme entering the PPF. It is difficult to understand why it is possible for JPI Media to acquire the business, no doubt in the expectation of generating a profit from it, but without taking any responsibility for its pension scheme," Mr. Field said.
A TPR spokesman said in a response to Mr. Field's letter: "Together 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."
"Our role at this stage is to assess the terms of the sale of the business to ensure the pension scheme has been treated appropriately. We continue to work closely with the scheme trustee and the PPF," the spokesman said.
Mr. Field also has asked for a detailed description of the regulator's involvement with Johnston Press. The spokesman said the regulator is responding to the letter.