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Regulator may step in over EMI pension fund

By CMU Editorial | Published on Friday 27 August 2010

The Pensions Regulator has been asked to step in and rule on a disagreement between EMI and the trustees of the music major’s pension fund. As previously reported, there is a hole in that fund of anywhere between £115 million and £271 million, and pressure has been mounting on EMI bosses and the firm’s owners Terra Firma to find some cash to plug the hole. Cash, of course, is not something EMI has in abundance.

The dispute is seemingly over just how much cash EMI should put into its pensions fund, presumably with the trustees saying “lots” and EMI/Terra Firma chiefs opting for “less”. The Pensions Regulator has the power to rule on the matter if the two sides can’t reach an agreement and could decide how much EMI has to pay, though at the first stage it is more likely the regulator would try to play an arbitrator role rather than making a ruling.

According to the BBC, EMI bigwigs have indicated that if the regulator was to be too harsh in any ruling it could send the music firm into insolvency, and the Beeb quote an independent pension consultant called John Ralfe who says that, given EMI’s current debt woes, if they were forced to pay a particularly large sum of money into their pension fund it could be “the straw that breaks the camel’s back”.

But still, given Terra Firma have been so keen to tell us of late just how much support they have from their investors for continuing to bail out EMI, presumably those investors could have a whip round to cover any shortfall.

The EMI pension fund only actually provides for 269 people, having been closed to new joiners in 2005.