The Pensions Regulator (TPR) has agreed a £363 million settlement deal with former British Home Stores (BHS) chief executive Philip Green.
At the last valuation the BHS pension scheme deficit stood at between £300 million and £571 million.
Green (pictured) has been in dialogue with TPR over the past 12 months about securing an agreement for the now collapsed department store’s members. The worry was these members who have not yet retired would see their pensions moved to the Pension Protection Fund (PPF) and thus be subject to minimum 10% cut.
However TPR has secured a £363 million payment from Green. This will go towards the creation of a new independent pension scheme, which will 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’.
TPR said BHS members will have the option between transferring to the new scheme, taking a lump-sum or remain in the current scheme and get their payments from the PPF.
Lesley Titcomb, TPR chief executive, said the deal was beneficial to members of the BHS scheme and the PPF lifeboat fund.
‘The agreement we have reached with Green represents a strong outcome for the members of the BHS pension schemes. It takes account of the interests of both pensioners and the PPF, and brings a welcome level of certainty to present and future pensioners,' she said.
‘Throughout our discussions with Green 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.’
As a result of the agreement TPR is no longer pursuing enforcement action against Green. The regulator said it is continuing with its action in connection to Dominic Chappell, who acquired BHS for £1 from Green’s Arcadia group in 2015.