The EMI Group has escaped censure from the Pensions Regulator after agreeing a funding deal worth nearly £200 million with its pension scheme’s trustees to address its pensions deficit.
The payment plan will see the embattled music giant make a £197 million contribution, including an immediate £16 million, to the EMI Group Pension Fund between now and April 2016.
June Mulroy, executive director for delivery at the Pensions Regulator, said: “As is often the case, our ability to impose a solution provides an incentive for parties to agree, even if at the last moment. We are determined that scheme funding targets are set with appropriate levels of prudence, and we will not hesitate to invoke our powers where necessary.”
Peter Murphy, partner at law firm Sackers who acted for the trustees, added: “It is tremendous news for everyone associated with the EMI Group Pension Fund that agreement has finally been reached in relation to its future funding. In the four years it has taken to reach this agreement, the trustees have worked tirelessly to achieve the best outcome they could possibly secure for their members.”
The deficit in the EMI pension scheme has been unresolved since 2007, despite first being referred to the Pensions Regulator in the same year. It is one of a myriad of financial issues facing the company, which recorded a pre-tax loss of £624 million in the year to April 2010, after an even bigger loss the year before of £1.75 billion.
In its 2009/10 annual report, EMI, home to the Beatles back catalogue and artists such as the White Stripes and Dizzee Rascal, said that the dispute over the size of the deficit was one of the factors that had cast “fundamental uncertainty” over the company’s future.