Johnston Press’s pension move under scrutiny from Frank Field
Trustees of the publisher’s pension fund are seeking a bailout.
The pensions watchdog is facing questions from MPs after the sale of i newspaper owner Johnston Press put its pensioners at risk of cuts.
Frank Field, the chairman of the Work and Pensions Committee, has written to The Pensions Regulator to ask if protections are in place to prevent pension schemes being “dumped” on the taxpayer-backed Pension Protection Fund (PPF).
It comes after the publisher, which has a stable of regional titles including The Scotsman and The Yorkshire Post, was bought out of administration by creditors through newly formed company JPIMedia over the weekend.
Jobs across the company’s titles have been safeguarded by the deal, but an assessment period has been triggered for the employees on the defined-benefit pension scheme, meaning it could be bailed out by the PPF.
It is difficult to understand why it is possible for JPIMedia to acquire the business, no doubt in the expectation of generating a profit from it, but without taking any responsibility for its pension scheme Frank Field
If the scheme is rescued by the official lifeboat, former employees could face cuts to their retirement incomes.
In a letter to Lesley Titcomb, outgoing chief executive of TPR, Mr Field asked for 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 JPIMedia 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, who is an independent MP after resigning from the Labour Party earlier this year, has previously taken business leaders to task over pension funds.
The veteran MP’s most notable campaign was fought against retail tycoon Sir Philip Green over the collapse of BHS.
A spokesperson for TPR said: “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.”
Johnston Press’s largest shareholder Custos Group has already expressed concern over the deal, accusing the publisher’s board of acting out of self-interest.
It said: “Their actions today, ensuring their own jobs are safe, but sacrificing the pensions of their loyal staff, many of whom will no doubt also lose their jobs under the new ownership of a US hedge fund, is simply a disgrace and a vulgar display of the worst elements of capitalism.”
Custos Group has threatened legal action over the pre-pack administration.
New statement from Custos regarding the PRE-PACK. Custos will sue both the Board of Directors and also JPIMEDIA LTD that acquired the shares in JP. BOD have effectively stolen Johnston Press. Clear breach of fiduciary duties. I will announce updates regularly on my twitter pic.twitter.com/efOHm28kZU— Christen Ager-Hanssen (@agerhanssen) November 18, 2018
Jeremy Wright, the Secretary of State for Digital, Culture, Media and Sport, faced emergency questions from MPs in the Commons on Monday over the sale of the titles.
“At this challenging time for print journalism, we are working hard to ensure its sustainability,” he said, referencing the Cairncross Review into the future of the UK press.
His Labour counterpart Tom Watson said “tech oligopolies” were partly to blame for the erosion of print media, and accused the Government of not acting quickly enough.
“Whilst ministers prevaricate and hold open sessions, the tech oligopolies have consolidated their advantage,” he said.