On the go: The Pensions Regulator will come under pressure from the industry to “show its teeth” when dealing with the recent Arcadia failure and ensuring the best outcome for members, Royal London has warned.
TPR must show it has learnt from the BHS debacle when it comes to handling Arcadia’s pension fund issues, according to Helen Morrissey, pensions specialist at Royal London.
“There have been calls on Arcadia chair Philip Green to make good the deficit and the regulator will be under pressure to show its teeth, especially after the criticism it faced when it last faced off with [Sir Philip] over his responsibilities to plug the pension deficit of the failed BHS chain back in 2016,” Ms Morrissey said.
Previously, Stephen Timms, chair of the Work and Pensions Committee, stated that TPR should ensure it was doing “everything in its power” to fight the corner of the pension scheme members.
He said: “This is a crucial moment for the regulator to show that it has learnt 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.”
The Arcadia Group, which includes high street brands Topshop, Burton and Dorothy Perkins, appointed administratorsfrom Deloitte on November 30 2020.
The administration raised concerns for the 10,000 members of Arcadia’s pension schemes, which have an estimated deficit of £350m and are being assessed for entry into the Pension Protection Fund.
Under the terms of an agreement reached in 2019, Arcadia agreed to provide security for the schemes to the value of £210m — up from an initial offer of £185m — which included an additional £25m agreed with TPR.
Tina Green, Sir Philip’s wife, agreed to provide a voluntary contribution of £75m over three years to help close the funding deficit of the pension schemes, plus an additional £25m, making a total of £100m.
FTAdviser reported in March last year that Lady Green’s payments would continue, while Arcadia’s would be deferred. In practice, instead of receiving £50m, the schemes will see a contribution of £25m.
BHS went into administration in April 2016, leaving the pension schemes in jeopardy a year after businessman Dominic Chappell bought the former department store chain from Sir Philip for £1.
In 2017, a £363m settlement with Sir Philip was reached to fund a new independent pension scheme for 19,000 former BHS workers, and in January Chappell was ordered to pay £9.5m into the schemes.
As a result of the BHS saga, the Pension Schemes Act, which was finalised by parliament this week, contains new powers for TPR to tackle employers who do not adhere to their pension responsibilities.
Ms Morrissey said: “As coronavirus continues to wreak havoc on the high street we could see these powers called upon more often in future.”
This article originally appeared on ftadviser.com
