Broadcaster STV strikes deal over £127m funding gap in pension schemes

0 STV’S chief executive Simon Pitts: ‘Deal provides certainty’ Broadcaster STV has struck a deal with the trustees of its final salary pension schemes to plug a £127 million deficit.

Following a triennial valuation of the Scottish & Grampian Television Retirement Benefits Scheme and the Caledonian Publishing Pension Scheme, the deficit has been estimated at £127m compared to £130m at the previous valuation date in 2016.

A 12-year recovery plan has been agreed with monthly payments unchanged from the previous plan. The 2019 payment will total £9m, with annual payments then increasing at the rate of 2 per cent a year.

As part of the agreement, if STV outperforms forecasts on net cash flow, it will also make additional payments into the scheme.

Under a similar arrangement under the previous agreement, STV is this month making a £1.4m additional cash contribution based on its 2018 performance.

STV said the recovery plan was designed to enable the schemes to “reach a level of funding self sufficiency” and allow them to operate without the need for further funding from the company.

The next triennial valuation will take place in 2021.

Simon Pitts, the chief executive of Glasgow-based STV, 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.”

In February, STV reported a rise in operating profits after a transformational year which saw the broadcaster take an £11.1m one-off hit from axing its STV2 channels.

However, it reported a 6 per cent hike in operating profits to £20.1m, while total revenue increased 8 per cent to £125.9m.