Sir Philip Green’s out-of-court settlement for the BHS pension fund prioritises 16 “loyal senior managers”, while he is set to receive £15m back from the deal, the chair of the work and pensions select committee has said.
Frank Field, who co-led the inquiry into the BHS demise last summer, said an initial analysis showed Green will receive £15m from the £363m settlement if there is a 90% take-up of the “winding-up lump sum” offered as part of the deal.
The £15m was offered as contingency in case it was required by the trustees, but if it is not needed, it will be returned to Green.
Green’s adviser, Deloitte, estimated that 90% would take up the option in the Project Thor proposed pension restructuring, as previously announced.
Field said even if double the number of eligible people choose not to take the lump sum option, Green will still receive more than £13m back.
As part of the settlement, scheme members were said to have received 88% of their benefits but the Pensions Regulator said some pensioners will receive less than 80% of what they have received under BHS scheme rules.
In a letter to Field, Pensions Regulator chief executive Lesley Titcomb outlined that 16 people – 10 pensioner members whose benefits are currently capped in the Pension Protection Fund (PPF) and a further six deferred members – are among those who will benefit more from the new deal than they would have done otherwise.
The cap is designed to incentivise the highest paid executives in a firm, with the highest pension benefits, to take care of the pension fund and prevent it falling into the PPF. Had the scheme gone into the PPF, members would have received, on average, 69% of promised benefits, the select committee said.
“I hope Sir Philip will recycle any refund back into the scheme as BHS pensioners will still be facing cuts in the benefits for which they paid,” said Field.
“It is also clear that Sir Philip prioritised his loyal senior managers, who have had the PPF cap on high pension benefits completely removed. Those who do far less well out of the settlement are the ordinary staff of working age, many of whom lost will have lost their jobs as well.”
A spokesman for Arcadia declined to comment but did note that the settlement was signed off by the regulator and the PPF, and was welcomed by the pension schemes’ trustees.