The Pensions Regulator ("TPR") has
announced that it has reached a settlement with Sir Philip Green to
help secure the pensions of 19,000 members of two BHS pension
schemes, following the collapse of the high street retailer.
The deal, worth £363m, includes the creation of an
independent pension scheme funded by the majority of the settlement
amount and to which members of the current BHS schemes can
transfer. If they do, they will receive the same starting
benefits to which they were entitled in the BHS pension schemes (at
a higher level than that which would otherwise be available from
the Pension Protection Fund ("PPF")),
with an annual increase rate for benefits built up prior to 6 April
1997 of 1.8% (as opposed to a nil increase for pre-6 April 1997
benefits under the PPF). The new scheme's trustee board
will include three professional trustees to "ensure there is
continuing robust independent governance" of the scheme, and
neither Sir Philip nor the Arcadia group will have any involvement
in its management.
Members do not have to join the new scheme: instead, they can
opt for a lump sum payment (if the value of their pension pot is
£18,000 or less), or remain in their current scheme and
receive their benefits from the PPF.
The agreement follows the issue, in November 2016, of Warning
Notices from TPR to Sir Philip, Taveta Investments Limited, Taveta
Investments (No. 2) Limited, Dominic Chappell and Retail
Acquisitions Limited, which set out TPR's case for each
recipient's liability to fund the pension schemes following the
sale and subsequent insolvency of BHS. Had no agreement been
reached with Sir Philip, the matter would then have been referred
to TPR's Determinations Panel. It has the power, amongst
other things, to issue a Financial Support Direction or a
Contribution Notice in order to recover funds due to the pension
schemes from the sponsoring employers, and others.
The BHS case demonstrates again that TPR has a useful array of
enforcement tools and, as TPR itself has indicated, it is
increasingly willing to use them. The threat of further
regulatory action clearly gave the parties involved in the BHS case
the encouragement they needed to agree a funding arrangement.
While the investigation against Sir Philip, Taveta Investments
Limited and Taveta Investments (No. 2) Limited will now cease,
enforcement action against Dominic Chappell and Retail Acquisitions
TPR's announcement regarding the settlement is available here.
The material contained in this article is of the nature of
general comment only and does not give advice on any particular
matter. Recipients should not act on the basis of the information
in this e-update without taking appropriate professional advice
upon their own particular circumstances.
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In SSE Generation Limited v Hochtief Solutions AG and another decided on 21st December 2016, the Court of Session in Scotland considered a contractor's potential design liability under the NEC Form of Contract.
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