In a deal with the Pensions Regulator, Sir Philip Green has agreed to pay £363 million in cash to rescue the BHS pension scheme, giving workers the same starting pension that they were originally promised. It’s a deal which is likely to help the billionaire keep his knighthood.
The considerable public anger in this case focused on Green’s initial reluctance to address the pensions gap coupled with the delivery of the tycoon’s £100 million 300-foot superyacht and new £46 million private jet.
The deal follows lengthy, complex discussions with the Pensions Regulator and the Pension Protection Fund, with the former bringing legal action against Green. The enforcement action has been halted but proceedings against Dominic Chappell, who purchased BHS from Green for £1 in March 2015, is set to continue.
Lesley Titcomb, the Chief Executive of the Pensions Regulator, said:
“The agreement we have reached with Sir Philip Green represents a strong outcome for members of the BHS pension schemes’. Frank Field MP, who called on Sir Philip Green to make good the pension scheme, welcomes the deal giving justice to BHS pensioners and former workers.
However, the deal means BHS workers will suffer cuts to their pension benefits within the new pension scheme, with workers receiving on average around 88% of the value of their original benefits. Despite its glorious imperfections, it is a better outcome than if the BHS pension scheme had fallen upon the mercy of the Pension Protection Fund, in which workers would have received approximately 75% - 79% of the fund.
The deal creates a new pension scheme where BHS workers will have the option of moving their pension into the new scheme, receiving a lump-sum payment, or remaining in the existing scheme.
Ill feelings toward Sir Philip Green remain strong. Grant Atterbury, a former BHS worker, commented on the deal saying it was ‘literally the least Green could do’.
Whether Sir Philip Green has done enough to restore his reputation remains to be seen.
Sir Philip Green has agreed a £363m cash settlement with the Pensions Regulator to plug the gap in the BHS pension scheme. Workers will get the same starting pension that they were originally promised. It brings to a close a long-running negotiation over benefits for former workers of the collapsed retailer.