The Pensions Regulator ("TPR") has announced that it has reached a settlement with Sir Philip Green to help secure the pensions of 19,000 members of two BHS pension schemes, following the collapse of the high street retailer.
The deal, worth £363m, includes the creation of an independent pension scheme funded by the majority of the settlement amount and to which members of the current BHS schemes can transfer. If they do, they will receive the same starting benefits to which they were entitled in the BHS pension schemes (at a higher level than that which would otherwise be available from the Pension Protection Fund ("PPF")), with an annual increase rate for benefits built up prior to 6 April 1997 of 1.8% (as opposed to a nil increase for pre-6 April 1997 benefits under the PPF). The new scheme's trustee board will include three professional trustees to "ensure there is continuing robust independent governance" of the scheme, and neither Sir Philip nor the Arcadia group will have any involvement in its management.
Members do not have to join the new scheme: instead, they can opt for a lump sum payment (if the value of their pension pot is £18,000 or less), or remain in their current scheme and receive their benefits from the PPF.
The agreement follows the issue, in November 2016, of Warning Notices from TPR to Sir Philip, Taveta Investments Limited, Taveta Investments (No. 2) Limited, Dominic Chappell and Retail Acquisitions Limited, which set out TPR's case for each recipient's liability to fund the pension schemes following the sale and subsequent insolvency...