Arcadia schemes to enter PPF assessment ‘shortly’

The letter, sent to Work and Pensions Committee chair Stephen Timms on December 18 and published on Tuesday, also confirms the regulator’s role in securing further guarantees from Tina Green, owner of the the group and wife of retail mogul Philip Green.

Speculation over the possible transfer of the schemes into one of the emergent DB superfunds had swirled following Arcadia’s insolvency, given one consolidator’s public courting of the Green family, and the pressure on the former BHS owners to be seen to be looking after scheme members.

The transfer of the schemes into the PPF assessment period, which TPR chair Charles Counsell wrote is expected “shortly”, may put a dampener on this speculation.

Company voluntary arrangement negotiations involving the regulator and the PPF last year resulted in a £310m package of additional support for the schemes, comprising security of £210m over assets within the company, and two £50m instalments of cash contributions paid by Lady Green.

Arcadia announced in early December that the second payment would be brought forward by Lady Green, although the regulator declined to confirm that this sum has now been paid. Meanwhile, assets underlying the guarantees will only be sold at opportune moments by the company’s administrators, before proceeds are distributed to creditors.

Asked by Mr Timms whether the regulator’s guidance on pausing DB contributions had affected the security of Arcadia staff’s pensions, Mr Counsell remained evasive, simply reminding the East Ham MP that trustees must not blindly accept requests to pause payments, and confirming TPR’s ongoing close contact with the scheme.

Mr Counsell also wrote that the regulator had learned lessons from recent cases, including its dealings with BHS, which was sold by Sir Philip for £1 in 2015 and collapsed, along with its scheme, the following year.

“We have already transformed the way we work with our new, clear, quick and tough approach, which is exemplified by the strong CVA deal we reached with Arcadia and Lady Green last year,” he wrote.

Addressing the risk that members of the schemes will be targeted by scammers preying upon fears of lost pensions, Mr Counsell assured that the regulator pursues a more joined-up strategy with other arms-length bodies, and that the PPF assessment period will prevent transfers out.

In addition, he wrote that savers must be at the heart of any superfund transfer: “Trustees need to be confident that a transfer to a superfund is in their members’ best interests, and that the transaction meets our ‘gateway principles’. Schemes should only be transferred into a superfund after the ceding employer has obtained clearance from TPR.”