Billionaire Sir Philip Green has agreed to pay £363m into BHS’ troubled pension scheme.
The loss-making department store went bankrupt in June 2016 after failing to raise the £60m needed to keep it afloat. This left a £571m black hole in its defined benefit (DB) pension scheme.
The payment follows an inquiry into BHS’ collapse and to discover if Green could have done more to save the business he eventually sold for £1 in 2015.
The Pensions Regulator (TPR) has ceased its enforcement action against Green.
The deal, which has won the support of the trustees, could save the scheme from falling into the Pension Protection Fund (PPF), removing uncertainty for its almost 20,000 members.
TPR chief executive Lesley Titcomb described the agreement as a strong outcome for the scheme’s members. “It takes account of the interests of both pensioners and the PPF, and brings a welcome level of certainty to present and future pensioners.
“Throughout our discussions with Sir Philip and his team, we have always been clear that we were determined to achieve the right outcome for members of the schemes both in terms of the amount and the structure of the settlement.”
Royal London policy director Steve Webb gives the credit for the deal to The Pensions Regulator.
“Sir Philip Green could have spared his staff many months of misery and uncertainty if he had stumped up the cash willingly, rather than only after many months of protracted negotiations,” the former pensions minister added.
Lincoln Pensions chief executive Darren Redmayne said: “Everyone appears to have won to some degree in this game of high stakes poker.
“The Pensions Regulator needed to get a result, Sir Philip Green had to repair his reputation in the most cost effective way and most importantly members now get better benefits than they would from the PPF lifeboat,” he added. “Each player could have played their hand for more in this negotiation but would have risked losing everything – as such, this looks like a decent result for all concerned.”
