Sir Philip Green agrees to contribute £363m to BHS pension scheme
Controversial retail tycoon Sir Philip Green has sought to put a torrid period of parliamentary and media scrutiny behind him, agreeing to put £363m in cash towards BHS’ substantial pension scheme deficit.
MPs investigated the sale of BHS last year and labelled Green the "unacceptable face of capitalism" for selling the high street store to former bankrupt Dominic Chappell for £1. There have since been calls for Green to be stripped of his knighthood.
Read more: Government mulls handing watchdog more powers over struggling pensions
Green said last year he would contribute to the BHS pension scheme deficit, and lengthy negotiations with the Pensions Regulator and the Pension Protection Fund (PPF) followed. If the scheme had been put under the stewardship of the PPF, some members – including workers who have yet to retire – would have seen their pensions cut by 10 per cent.
Today Green said in a statement:
I have today made a voluntary contribution of up to £363m to enable the trustees of the BHS Pension schemes to achieve a significantly better outcome than the schemes entering the Pension Protection Fund (“PPF”), which was the goal from the outset.
Iain Wright, the Labour MP who headed up the parliamentary investigation into BHS with Frank Field, has tweeted that Green's promise of paying "up to" £363m was not "satisfactory".
Sir Philip Green's statement. This development very welcome but "up to" £363 million isn't satisfactory – will need to be full amount #BHS pic.twitter.com/lZ6G4xVmTT
— Iain Wright (@Iain_Wright_) February 28, 2017
And John Hannett, general secretary of shopworker's union Usdaw, said it was difficult to understand "why we have had to campaign for so long" to reach a resolution.
Field welcomed the settlement, saying that it was "an important milestone in gaining the justice for BHS pensioners and former workers that we have been pushing for since beginning our inquiry into the downfall of BHS."
A spokesperson for Green said there would be administrative costs involved in the transaction, meaning pensioners may not directly receive the full £363m.
The PPF's chief executive Alan Rubenstein said the agreed settlement relieves PPF levy payers from the cost of paying for the BHS pension scheme benefit, and that the new scheme will be monitored by the Pensions Regulator, and protected by the PPF.
Green's statement in full
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“I have today made a voluntary contribution of up to £363m to enable the trustees of the BHS Pension schemes to achieve a significantly better outcome than the schemes entering the Pension Protection Fund (“PPF”), which was the goal from the outset. The settlement follows lengthy, complex discussions with the Pensions Regulator (“tPR”) and the PPF, both of which are satisfied with the solution that has been offered. To achieve a significantly better outcome than entering the PPF, the contribution required to achieve this long-term solution was arrived at by the actuaries for both The Regulator and the Trustees. All relevant notices, including legal matters and claims from tPR, have been withdrawn bringing this matter to a conclusion. Mr Chris Martin, chairman of the BHS Pension trustees, who will provide his own press release, will confirm that he is very happy with the outcome that has been achieved. Once again I would like to apologise to the BHS pensioners for this last year of uncertainty, which was clearly never the intention when the business was sold in March 2015. I am also happy to confirm that any of the pensioners that have faced cuts over the last year will now be brought back to their original BHS starting level pension and will all be made whole. I hope that this solution puts their minds at rest and closes this sorry chapter for them.” Sir Philip Green |
How we got here – Saga of the pensions black hole
March 2015
Sir Philip Green sells BHS to Retail Acquisitions, a firm owned by serial bankrupt Dominic Chappell, for £1.
April-May 2016
BHS collapses into administration. Green calls for Frank Field’s resignation after Field says Green should be stripped of his knighthood.
June 2016
Administrators say no buyer for BHS has been found. Later that month, Green tells a parliamentary inquiry he will ‘sort’ the BHS pension scheme black hole.
August 2016
The final BHS stores close. FRP Advisory is appointed as BHS liquidators, Green is chased around the Greek islands by cameras and TV reporters.
October 2016
MPs vote to strip Green of his knighthood. During a two-hour debate, Labour MP David Winnick calls Green a "billionaire spiv".
November 2016
The Pensions Regulator steps up its probe into Green, revealing it will move to the next stage of enforce-ment powers in a bid to seek redress.
February 2017
Green strikes a deal with The Pensions Regulator, agreeing to pay up to £363m to alleviate the black hole left in the BHS scheme.