Green could receive £15m refund from BHS pension deal - MPs

Philip Green could get back up to £15m of his £363m payment into the pension scheme of collapsed retailer BHS, MPs said on Tuesday.

The Work & Pensions select committee said that under the terms of the deal struck with the Pensions Regulator last month, the refund could be due to green if 90% of workers chose to take a cash lump sum instead of an annuity.

Committee chair Frank Field, who has been a fervent critic of Green over his handling of the sale of BHS and subsequent collapse of the business, said the retailer's own advisers had come up with the 90% figure.

"Sir Philip’s built-in refund begins with the very first lump sum taken, so even if double the number of eligible people expected choose not take the lump sum option, he will still get over £13m back," the committee said.

"The headline figure that scheme members will receive 88% of their promised benefits hides a great deal of variation. Owing to less generous indexation in the new scheme, some pensioners will receive less than 80% of what they would have received under BHS scheme rules."

The committee found that 16 higher paid executives would do best out of the arrangement, as they would have been subject to a cap from the Pension Protection Fund (PPF) had Green not agreed to help make up part of the scheme's £571m shortfall.

The cap exists 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, the committee added.

Field said Green should recycle any refunds back into the scheme to help members receive better retirement benefits.

"It is also clear that Sir Philip prioritised his loyal senior managers, who have had the PPF cap on high pension benefits completely removed. That measure was designed to encourage those in positions of influence to urge prudence and responsibility; I would be worried if TPR was content to see it jettisoned as a matter of course," he said in a statement."

"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."

Green owned BHS for 15 years until he sold it to Dominic Chappell, a former bankrupt £1 in March 2015. Just 13 months later the chain fell into administration leading to recriminations about the pension fund deficit and a parliamentary inquiry which found that large amounts had been taken from the business in dividends.

The Pensions Regulator began legal action against Green last year to try to force him to help plug the pension hole. This was stopped after he finally agreed to stump up.

Green declined to comment when contact by Digital Look. However, sources close to the matter said the £15m was not a refund but part of the settlement as a contingency in case it was needed by the pensions trustees.