The Pensions Regulator (TPR) has published a report into its involvement with the BHS pension scheme that led to a £363 million settlement with Sir Philip Green.
The regulatory intervention report (PDF, 161kb, 45 pages) covers key actions in the case including TPR’s anti-avoidance investigation into the potential use of its Financial Support Direction and Contribution Notice powers - culminating in TPR issuing Warning Notices against a number of respondents in November 2016.
The report shows how, in parallel with its investigation, TPR held extensive discussions with Sir Philip and his advisers to reach a settlement, announced in February this year.
As already announced, the settlement agreement provides funding for a new independent pension scheme to give future pensioners the option of the same starting pension as they were originally promised by BHS, and higher benefits than they would get from the Pension Protection Fund (PPF).
TPR Chief Executive Lesley Titcomb said: “We publish these reports on completion of significant cases in order to be as transparent as we can be about our regulatory work. This report on BHS illustrates to employers and trustees that we will use our powers to protect savers but that we are prepared to be flexible in our approach and work with all parties to reach the right outcome.
“In this case, we reached a settlement with Sir Philip Green that represents a strong outcome for the members of the BHS pension schemes. It takes account of the interests of both pensioners and the PPF, and brings a welcome level of certainty to present and future pensioners.”
The report looks back to TPR’s previous interactions with the BHS pension schemes over a number of years, including previous scheme funding discussions and business restructuring proposals.
Nicola Parish, Executive Director of Frontline Regulation, said: “The report highlights the lessons we have learned from this case about how we can regulate more effectively.
“We are already acting more quickly to intervene where we consider schemes to be underfunded, or where there are indications that employers may be avoiding their responsibilities. As part of our TPR Future programme, we are reviewing our internal processes and ways of working to be more efficient, more outcome-focused and communicate clearly to schemes what we expect from them.
“In addition we are recruiting staff to increase proactive casework, ensure early engagement with schemes and progress investigations more efficiently.”
- The BHS regulatory intervention report is published under powers set out in section 89 of the Pensions Act 2004. More information can be found on TPR’s policy for using section 89 in the essential guide to how we publish information about cases (PDF, 60kb, 6 pages).
- In November 2016, Warning Notices were issued to Sir Philip Green, Taveta Investments Limited and Taveta Investments (No.2) Limited.
- On 28 February 2017, TPR reached a settlement with Sir Philip, that led TPR to stop regulatory action against Sir Philip Green, Taveta Investments Limited and Taveta Investments (No.2) Limited. For more information see this press release.
- The settlement reached was expressly on the basis of no admission of liability on the part of Sir Philip or associated Taveta companies. Due to a settlement being reached, TPR acknowledges that Sir Philip has not had the opportunity to respond formally to the allegations outlined in its Warning Notice.
- TPR has taken action separately against Dominic Chappell and Retail Acquisitions Limited. This matter is ongoing and therefore today’s report omits details and information which could prejudice this ongoing case.
- 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).