Box Clever and Storm Funding decisions show scope of the regulator’s financial support direction powers

Two recent decisions have demonstrated the latitude that the Pensions Regulator has in pursuing a case for a financial support direction (FSD) and as to the terms and enforcement of any FSD that is issued.

In January 2012, the Determinations Panel (DP) of the Pensions Regulator determined that an FSD should be issued to five companies in the ITV group. This was in the context of a joint venture (Box Clever) that had been established by the companies with another party in 1999–2000, which saw TV rental businesses being hived down into the joint venture companies.

The joint venture companies paid for the businesses that they received, funded by secured loans from a bank, and they put in place a new pension scheme for the employees who transferred to them. The businesses failed a couple of years later. Administrative receivers were appointed and sold the businesses, with all proceeds going to the bank, leaving the pension scheme with a significant deficit that the joint venture companies could not meet…

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