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Pensions regulator yet to receive 'credible' offer from former BHS owner Sir Philip Green

Sir Philip Green pledged to "sort" the BHS pension scheme four months ago but there's still no settlement and since then the scheme's predicament has worsened considerably.

The last BHS stores closed in August so the pension scheme no longer has a company supporting it.

The deficit, last measured at £571 million on a "buy out" basis early in 2015, will have ballooned since the referendum as gilt yields have slumped. Frank Field suggests it's now as high as £700 million, he may be right.

Sir Philip has told ITV News that he still plans to rescue the scheme, which supports 20,000 former staff, from the Pension Protection Fund.

Doing so won't cost him anything like £700 million but is likely to set him back well in excess of £200 million.

Sir Philip has asked his advisers, Deloitte, to work-up a plan that involves offering members the chance to either cash in their pensions and walk away with a cash lump sum or remain and receive a full pension but lower annual increases.

Fundamentally, the crisis comes down to money and the Pensions Regulator may have a figure in mind. Credit: PA

Why hasn't agreement been reached yet?

Green speaks of "very strong dialogue" and "very many moving pieces" and it's absolutely true that there are complexities: the level of public scrutiny and the political heat; the size of Arcadia's pension deficit (Green could hardly be seen to offer BHS pensioners a better deal than his other staff); the provision of long-term guarantees.

But fundamentally this comes down to money.

Negotiations with the BHS pension trustees and The Pensions Regulator are ongoing.

My understanding is that Sir Philip has made a series of proposals since June. Tonight, the trustees were unavailable for comment but, in a statement, a spokesperson for the Pensions Regulator said:

Our focus remains on achieving the best possible outcome for members of the BHS pension scheme and PPF levy payers and our discussions with Sir Philip Green and his advisers about a possible settlement are ongoing.

We are yet to receive a comprehensive and credible written proposal and have made clear what we require in this regard.

– Pensions Regulator

Everyone agrees that a cash payment is necessary to ensure the long-term viability of the scheme. The regulator is signalling that it has a number in mind and that, thus far, Green has not been prepared pay it.

My understanding is that The Pensions Regulator is set to conclude its anti-avoidance investigation into BHS - one that seeks to establish if Sir Philip and others have outstanding financial obligations to the scheme - by the end of November.

I'm told that if the regulator can't reach a negotiated settlement with Sir Philip within the next few weeks it intends to use its recovery powers to reclaim money.

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