STV reaches deal on £127m pension deficit

Glasgow-based media firm STV Group plc said on Thursday it reached an agreement with the trustees of the company’s defined benefits pension schemes “for the 1 January 2018 triennial actuarial funding valuations and recovery plans.”

STV said: “The deficit on an actuarial basis was £127m on a pre tax basis at 28 February 2019 compared to £130m on a pre tax basis at the previous settlement date of 30 November 2016.

“A 12 year recovery plan has been agreed with monthly payments unchanged from the previous recovery plan. 

“The 2019 payment will total £9.0m with annual payments increasing at the rate of 2% per annum over the term of the plan.

“Additionally, in the event of outperformance against the company’s sensitised forecast net cash flow, contingent funding payments equivalent to 20% of any outperformance above a benchmark of available cash will be paid to the schemes. 

“Sensitised forecast net cash flow is defined as available cash flow pre-pension deficit funding payments and returns to shareholders. 

“This is unchanged from the previous valuation methodology and has resulted in a £1.4m additional cash contribution for 2018 (2017:£nil) which will be paid in April 2019.

“The recovery plan and further derisked investment strategy are designed to enable the schemes to reach a level of funding self sufficiency at the end of the recovery plan period, allowing the schemes to operate without the need for further funding from the company and with a level of investment risk which is planned, at that time, to have been reduced to gilts plus 0.5%.

“The next triennial valuation will take place as at 1 January 2021.”

STV CEO Simon Pitts said: “This pension scheme valuation agreement provides certainty to both STV and the schemes’ trustees by putting the schemes on a clear path to self-sufficiency while demonstrating STV’s continued commitment and support.”

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Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.