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Best-paid former BHS executives gain most from Green's pension deal

Best-paid former BHS executives gain most from Green's pension deal
March 21, 2017

LONDON - British retail tycoon Philip Green's deal with the regulator to plug a hole in the pension schemes of collapsed department store BHS will see a small number of the highest-paid former managers benefit the most, a parliamentary committee said on Tuesday.

A report by the lower House of Commons' Work and Pensions Committee also found billionaire Green could receive a 15 million pound ($18.6 million) refund from the 363 million pounds payment he made to the BHS pension schemes last month.

Green owned BHS for 15 years before he sold the loss-making 180-store chain to Dominic Chappell, a serial bankrupt with no retail experience, for one pound in 2015. BHS went into administration in April 2016. Some 11,000 jobs were lost.

In a July report, lawmakers accused Green of greed and disregard for corporate governance that led to the collapse of BHS. Green said the report was biased and unfair.

Green's deal with the pensions regulator gave the 19,000 members of the BHS pension schemes the option of the same starting pension they were originally promised by BHS, and higher benefits than they would get from the lifeboat scheme, the Pension Protection Fund (PPF).

Alternatively, scheme members could opt for a lump sum payment if eligible or remain in their current scheme and receive benefits from the PPF. The lump sum option is available to members with small pots of up to 18,000 pounds in value.

On Tuesday, lawmakers said their analysis showed those who did best were the 16 people with the best pensions, while some pensioners would receive less than 80 percent of what they would have received under BHS scheme rules.

They also found that, if there was a 90 percent take-up of the lump sum payment option, Green gets a 15 million pound refund.

“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," said Frank Field, chair of the committee and long time critic of Green.

“It is also clear that Sir Philip prioritised his loyal senior managers, who have had the PPF cap on high pension benefits completely removed," he said. A spokesman for Green declined to comment on the report. -Reuters