On the go:Philip Green is being pressured to “make good” on promises to 10,000 members of the Arcadia pension scheme as his retail empire is on the brink of filing for administration, which would leave the scheme in the Pension Protection Fund.
According to the Financial Times, the retail group, which includes brands Topshop, Burton and Wallis, was hit hard by shutdowns this year and is on the brink of being the UK’s biggest retail casualty of the pandemic, which could come as soon as Monday.
If the group enters administration, its pension scheme would enter an assessment period at the PPF. However, the scheme’s £350m deficit raises the prospect that it would have to be rescued by the pensions lifeboat, which under current rules cuts benefits for members that have not reached retirement age by 10 per cent.
Stephen Timms, the Labour chair of the Work and Pensions Committee, argued that there “is unquestionably a moral case for the Green family to do the right thing and guarantee Arcadia’s hardworking staff what is rightfully theirs, whatever happens this Christmas”.
“But the Pensions Regulator must also ensure that it is doing everything in its power to fight the corner of the pension scheme members,” he noted.
TPR approved an agreement in 2019 which would see Arcadia providing security for the schemes to the value of £210m. Tina Green, Sir Philip’s wife, agreed to provide a voluntary contribution of £75m over three years to help close the funding deficit on the pension schemes, plus an additional £25m, making a total of £100m.
Pensions Expert reported in March this year that Lady Green’s payments will continue, while Arcadia’s will be deferred. In practice, instead of receiving £50m, the schemes will see a contribution of £25m.
In a letter to TPR’s chief executive Charles Counsell sent on Monday, Mr Timms requests assurances from the regulator that it has learnt the lessons from past corporate collapses.
He also asks Mr Counsell to clarify when the £100m guaranteed by Lady Green is likely to be paid, and when the £210m in assets previously secured will be transferred to the scheme.
Mr Timms said: “This is a crucial moment for the regulator to show that it has learned the lessons of previous corporate collapses, such as those of BHS and British Steel. While staff will be worried about possible job losses, TPR must take firm and decisive action to protect them from fraudsters.”
A spokesperson for the Arcadia pension schemes told the FT: “The trustees are aware of recent media speculation about the future of Arcadia; they are consulting closely with the company and will continue to keep members updated.”
A PPF spokesperson said: “We are unable to comment on trading companies. Members of Arcadia’s defined benefit pension schemes can be assured of our ongoing protection.”
