Green urged to fund Arcadia pensions scheme

Arcadia owner Philip Green has been urged to make personal contributions to the pension scheme to counter the “worryingly high” deficit, before regulator or parliament step in.

In a letter from the Work and Pensions Committee chair, Frank Field, Green has been asked to replicate the personal funding he gave to BHS pension scheme members following a similar situation, or “The Pensions Regulator (TPR) will have no choice but to take action”.

It follows a statement by TPR yesterday (23 May), which branded the planned £100m cash injection into the Arcadia scheme, to be paid over three years, “insufficient”.

Field wrote: “It was disappointing to see the proposals that contributions to reduce the deficit will be halved as part of the financial restructuring. I welcome reports the you and Lady Green are making personal contributions to mitigate the reduction but TPR have said this is not sufficient to ensure adequate protection for scheme members.

“Might I please ask you to offer a guarantee to Arcadia staff that you would do the same for them should the deficit reduction plan prove insufficient – and this time, without the need for regulator or parliament to step in first.”

As part of the company voluntary agreement, Green proposed a shareholder cash injection of £100m, but also looked to halve the scheme’s recovery payments, which currently holds a deficit of £500m, from £50m to £25m, in a move that would see pensions contributions reduced.

A TPR spokesperson said: “We note from the CVA announcement that the shareholder is prepared to put an additional £100m into the scheme over a number of years to bridge a shortfall in deficit recovery contributions.

“However, we do not consider the proposals are sufficient to ensure that members of the scheme are adequately protected.”

In order for the company's recovery plan to proceed, Green would need it to be voted into action by Arcadia's creditor base, although TPR's denouncement of the proposal could harm his chances.

Pension Protection Fund (PPF) chief executive, Oliver Morley, said: “We are now reviewing the relevant Arcadia CVA so that on June 5 we can vote in the best interest of the schemes and the PPF.

“We will support The Pensions Regulator to achieve this and want to reassure scheme members that we are here to protect them at this concerning time.”

In the letter, Field also address issues concerning reports that Green is looking to put the Arcadia pension scheme into a superfund.

“At this stage, this just seems like speculation,” he wrote.

“Might I offer you the opportunity to put an end to that speculation, by giving a public commitment now, that this will not happen unless and until the scheme is fully funded and a clear, agreed regulatory framework is in place?”

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