BHS exec scheme next to achieve PPF-plus outcome

The £2.5m deal with Legal & General sees another cohort of employees achieve a ‘PPF-plus’ level of benefits, two years after 9,000 members of the BHS2 pension scheme had bulk annuities purchased for them with the Pension Insurance Corporation.

Members of BHS2, set up after a cash injection from former owner Philip Green, had their benefits bought out in full, but had already accepted a lower level of pension increases when opting to transfer into the scheme.

Some members opted to remain in the original BHS DB plan, which is now in the PPF.

Chris Martin, chair of the scheme’s trustee board and executive chairman of Independent Trustee Services, welcomed the deal as a good outcome for members.

“This was made possible by proactive trusteeship in managing the assets, monitoring the funding level and taking advantage of attractive pricing in the bulk annuity market,” he said.

“Despite its small size, the transaction was particularly innovative, and I would like to thank Legal & General for their support. I’d also like to thank our co-trustees along with our advisers, Willis Towers Watson, Eversheds Sutherland and Barnett Waddingham, for their help through the whole process,” he continued. According to Legal & General, the insurer was able to innovate by shaping the benefits it offered in line with member choices.

The deal brings to an end a saga that has run since 2016, when BHS collapsed having been bought by Dominic Chappell.

During his trial for tax evasion, Mr Chappell told Southwark Crown Court in October of Sir Philip’s intense dislike of the Pensions Regulator, and promises made to plug the deficit of BHS pension schemes.

As reported in the Financial Times, Mr Chappell said that the retail tycoon had promised him “as a billionaire and knight of the realm” that he would plug the BHS pensions deficit, but that when he acquired the retailer from Sir Philip for £1 in 2015, the deficit remained unresolved.