£363m pensions settlement with BHS boss
Thousands of ex-BHS staff will be offered the starting pension they were originally promised with higher than Pension Protection Fund (PPF) benefits, now that The Pensions Regulator (TPR) has agreed a cash settlement worth up to £363m with Chairman, Sir Philip Green.
The arrangement will see Sir Philip provide funding for a new independent pension scheme to give pensioners the option of the same starting pension as they were originally promised by BHS, and higher benefits than they would get from the PPF.
The announcement brings certainty to the 19,000 members of the existing BHS pension schemes and closes TPR’s enforcement action against Sir Philip.
TPR Chief Executive, Lesley Titcomb, said:
“The agreement we have reached with Sir Philip Green represents a strong outcome for the members of the BHS pension schemes.
“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.”
The Board of the new scheme will be made up of three professional independent trustees to ensure there is continuing robust independent governance.
Members of the current BHS schemes will have three potential options: to transfer to the new scheme, opt for a lump sum payment if eligible, or remain in their current scheme (and receive benefits from the PPF).
TPR will continue to monitor the existing BHS schemes to ensure members are kept up to date on progress. The trustees will keep members updated, and, in due course, a helpline will be launched so that members can discuss their options with an independent financial adviser.
Nicola Parish, Executive Director of Front Line Regulation, said:
“We are confident that the agreement we have reached with Sir Philip represents a good outcome for current and future BHS pensioners, and, as such, our regulatory action will now cease.
“In reaching such a decision, we have to balance the outcome of any settlement against what we might achieve by pursuing anti-avoidance action, the risk of a prolonged period of legal challenge in the courts, and the delay and uncertainty that would bring to members.”
TPR’s anti-avoidance enforcement action against Sir Philip Green, Taveta Investments Limited, Taveta Investments (No. 2) Limited, will now cease. Enforcement action continues in respect of Dominic Chappell and Retail Acquisitions Limited.