UK

Philip Green Pays £363 Million To Settle Pensions Of Former BHS Staff After Collapse

Retailer's collapse left pensions blackhole.

28/02/2017 16:22 GMT

Sir Philip Green has paid £363 million to settle the pension schemes of collapsed high street retailer BHS, after legal action to force him to pay out.

Sir Philip used to own the chain before it collapsed, leaving 11,000 people unemployed. The £571 million hole in its pension pot for 19,000 current and future pensioners was one of the main reasons it failed to find a buyer.

BHS going into administration led to a high-profile investigation by MPs, which concluded Sir Philip had “behaved like Napoleon”, and “plundered” and “raked off” money from the retailer.

There were calls for Sir Philip to be stripped of his knighthood over BHS’s collapse.

Sir Philip initially offered £250 million to the pension scheme, the BBC reported in November.

The Pensions Regulator started its legal action against him last year which has now been halted after this deal.

The body said its deal with Sir Philip “brings a welcome level of certainty” to those whose retirements relied on money from the fund.

Bobby Yip / Reuters
Sir Philip Green faced enforcement action to make him pay into the scheme

The regulator said it was continuing enforcement action against Dominic Chappell, who owned BHS when it went into administration.

Sir Philip said: “I have today made a voluntary contribution of up to £363m to enable the trustees of the BHS Pension schemes to achieve a significantly better outcome than the schemes entering the Pension Protection Fund (PPF), which was the goal from the outset.

“The settlement follows lengthy, complex discussions with the Pensions Regulator and the PPF, both of which are satisfied with the solution that has been offered.

“To achieve a significantly better outcome than entering the PPF, the contribution required to achieve this long-term solution was arrived at by the actuaries for both The Regulator and the trustees.

“All relevant notices, including legal matters and claims from the regulator, have been withdrawn bringing this matter to a conclusion.”

Neil Hall / Reuters
BHS went into administration in April, 2016

Nicola Parish, the regulator’s 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.”

The regulator’s chief executive Lesley Titcomb said: “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.”