The processes which The Pensions Regulator and Pension Protection Fund apply when a scheme is at risk of falling into the Pension Protection Fund are “not fit for the current commercial world” according to former BHS finance consultant Michael Hitchcock.

Giving evidence at the Work and Pensions Committee, Hitchcock said the BHS pension scheme “absolutely did not have to go into the PPF”.

Despite having meetings with TPR and the PPF about plans to restructure the scheme, which Hitchcock described as a “Mexican stand-off”, he said both the PPF and TPR rejected the proposals.

“I have to suggest if I may be so bold that the process of the TPR and the PPF is not fit for the current commercial world, it is cumbersome, it is not commercial and I do not think it is acting in the best interests of the pensioners, who unfortunately in this situation will suffer”

A spokesperson for The Pensions Regulator said: “While we were involved in discussions with Retail Acquisitions Limited regarding the pension scheme after the sale of BHS, at no time was a formal proposal put to us for a restructuring of the scheme. It is therefore not correct to say we did not approve any scheme restructure plans.

“We are fully aware of the demands on parties when a commercial or business transaction is being considered. Where parties approach TPR to consider a transaction or the restructuring of a pension scheme, we always endeavour to respond and work with parties as quickly as possible if the correct information is provided. Clearly we cannot agree to anything unless we are shown credible figures.

“If we do receive the right information before a sale goes through, we can act quickly to grant clearance for a transaction to confirm we will not use our anti-avoidance powers. However, pension scheme restructuring plans, which can involve a Regulated Apportionment Arrangement (RAA), are often complex and will also need the involvement of the trustees and the PPF. They can take time to consider and also require the correct information to answer any questions or concerns we may have.

“We recognise that this is a particularly difficult time for BHS employees. Our anti-avoidance investigation continues and our chief executive has given a clear commitment that we will have made significant progress by the end of 2016. It’s important that we do not prejudice this complex case and are able to progress it quickly.”

The PPF was contacted by Pensions Age for comment but chose not to respond.

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