Sir Philip Green could potentially receive a £15m refund from the £363m he has paid towards the BHS pension scheme, details from the out-of-court settlement have revealed.

Initial analysis by the Work and Pensions Committee shows that if there is a 90 per cent take-up of the ‘winding-up lump sum’ option offered as part of the settlement, then Green is in line to get a refund of £15m. Interestingly, 90 per cent was the estimate of take-up of the same option in the Project Thor proposed pension restructuring made by Green’s own advisers, Deloitte.

However, even if double the number of eligible people expected to take the lump sum choose not to, Green will still get over £13m back as it is a built-in refund which begins with the very first lump sum taken.

Furthermore, analysis by the Committee reveals that there is variation around the headline ’88 per cent of promised benefits’ figure, with actually just a small number of the highest paid former managers set to do the best out of the deal.

Due to the less generous indexation of the new scheme set up, some pensioners will receive less than 80 per cent of what they would have received under BHS scheme rules. Those that do best are the 16 people with the best pensions as they would have been subject to the PPF cap, which has been removed as part of the settlement and will not be applied in the new scheme.

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. However, had the scheme gone into the PPF then members would have received, on average, 69 per cent of promised benefits.

Commenting, Work and Pensions Committee chair Frank Field 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.”

“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. 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.

“HMRC will not tell us what the tax implications of this settlement are but I fervently hope the public purse will not be missing out in the same way it does by the Greens’ complex offshore business arrangements."

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