BHS: TPR launches enforcement action
Wednesday 2 November 2016
TPR seeks redress for 20,000 pension scheme members following investigation
The Pensions Regulator (TPR) today confirmed that following a complex investigation it has formally begun enforcement action to seek redress on behalf of the BHS pension schemes.
TPR has sent 'Warning Notices' – statements of its case – to Sir Philip Green, Taveta Investments Limited, Taveta Investments (No. 2) Limited, Dominic Chappell, Retail Acquisitions Limited.
Each notice runs to over 300 pages, and sets out the arguments and evidence as to why TPR believes the respondent should be liable to support the BHS pension schemes, following the sale of the business in March 2015 and its subsequent insolvency.
The notices set out evidence to support the use of both TPR’s Contribution Notice (CN) and Financial Support Direction (FSD) powers. A CN demands a specified sum of money, and an FSD requires respondents to put ongoing support in place for a pension scheme, which must first be agreed with TPR.
Chief Executive Lesley Titcomb said: “We have been clear in our public commitment to make significant progress by the end of 2016 and the issue of these notices meets that commitment.
“Our decision to launch enforcement action is an important milestone in our work to attain redress for the thousands of members of BHS schemes who have been placed in this position through no fault of their own.
“Issuing Warning Notices at this time reflects the outcome of our investigations and that we are yet to receive a sufficiently credible and comprehensive offer in respect of the BHS schemes.
“We continue to pursue the best deal for members of the BHS pension schemes. If parties wish to approach us with settlement offers, that course remains open to them.”
Those who have received Warning Notices now have a specified period of time to respond with their comments and representations in relation to the warning notice. TPR’s case teams will then consider these before the case can be passed to TPR’s Determinations Panel, which operates at arm’s length from TPR’s case teams and decides on the exercise of some of TPR’s most significant powers, including CNs and FSDs.
- TPR initiated an anti-avoidance investigation in relation to BHS in March 2015. Since then, a complex investigation has been in progress including demands for access to, and subsequent review of, almost 100,000 documents, as well as meetings and negotiations with various parties and stakeholders. Warning Notices issued to Sir Philip Green, Taveta Investments Limited and Taveta Investments (No. 2) Limited, are different to those issued to Dominic Chappell and Retail Acquisitions Limited.
- The Determinations Panel (DP) is a committee that operates at arm’s length from TPR’s case teams and makes decisions, known as 'determinations', on the use of some of TPR’s most significant powers.
- Members of the DP are people with legal, financial and / or pensions knowledge. The DP’s decisions are based on the evidence presented by TPR’s case team and by the directly affected parties (DAPs). All DAPs involved are given the opportunity to express their views.
- Any sum imposed on a party by a CN will be decided if and when the case has been heard by the DP, and after any reviews and appeals which may follow.
- If an FSD is imposed by the DP, the form and amount of any financial support will need to be agreed between the party concerned and TPR after the Panel has issued its determination. If no agreement can be reached, then the law allows TPR to move to the imposition of a CN instead.
- In the meantime, the schemes remains in the Pension Protection Fund (PPF) assessment period and members will receive PPF levels of compensation.
- TPR has produced two quick guides to its anti-avoidance powers and determinations process and a flowchart on the general procedures a case will follow. Please see our media guides.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
David Morley 01273 662091
Matt Adams 01273 662086