Sir Philip Green has paid £363m to settle the pension schemes of collapsed retailer BHS, eight months after he pledged to “sort” the issue.
“I have today made a voluntary contribution of up to £363m to enable the trustees of the BHS Pension schemes to achieve a significantly better outcome than the schemes entering the Pension Protection Fund (PPF), which was the goal from the outset,” he said in a statement.
The billionaire said the settlement meant that all legal matters and claims from the Pensions Regulator had now been withdrawn.
The cash payment remains significantly less than the £571m pension deficit the firm was left with when it went bust in April last year, leaving 11,000 staff out of work and 19,000 facing shortfalls in their retirement earnings.
The agreement with Sir Philip paves the way for a new, fully-funded scheme, which members can transfer to. It was broadly welcomed.
It was a far cry from the sharp criticism levelled at him by MPs for selling the chain a year before its collapse, for a nominal £1, to former bankrupt Dominic Chappell.
MPs also called for the Topshop billionaire to be stripped of his knighthood as negotiations with the PPF and regulator dragged on in the wake of the parliamentary inquiry.
He described the findings as “bizarre”.
A co-chair of that investigation, Frank Field MP, said Tuesday’s settlement amounted to a milestone, not justice – adding the matter “doesn’t end here”.
The veteran Labour MP told Sky’s Ian King Live that Theresa May’s pledge to stand up for ordinary working people would ring “hollow” unless she supported parliament’s wish that Sir Philip lose his gong – despite the “welcome” settlement.
In his statement, Sir Philip concluded: “Once again I would like to apologise to the BHS pensioners for this last year of uncertainty, which was clearly never the intention when the business was sold in March 2015.
“I am also happy to confirm that any of the pensioners that have faced cuts over the last year will now be brought back to their original BHS starting level pension and will all be made whole.”
That means that current pensioners, who have received lower pension benefits since March 2016 because of
the PPF level of compensation being paid, will net lump sums to make those underpaid benefits whole.
Alan Rubenstein, chief executive of the PPF, said: “This settlement… relieves the PPF’s levy payers of the cost of meeting the initially reported shortfall.
“The Pensions Regulator will be monitoring the new scheme and members will be protected by the Pension Protection Fund.”
Mr Field said: “I welcome this out-of-court settlement and it is an important milestone in bringing justice to BHS pensioners and its workers… I think there are a lot of other issues which are not solved by this which we will obviously be looking at and the courts and everybody else will be.
“It’s not justice, but it is a milestone.”
Mr Chappell’s company, Retail Acquisitions Limited, reacted: “At long last Sir Philip Green has faced his responsibilities and paid the money to the BHS pension scheme.
“If Sir Philip, a man who is worth billions and was knighted by the government for services to retail, had settled earlier we firmly believe BHS would still be in existence today.
“It is a great shame that it has taken this long and has given a great deal of uncertainty to nearly 20,000 pensioners.”