The BHS pensions deal has a major sting in its tail
When it comes to pensions there’s almost always a devil in the detail and it almost always takes forever to emerge. It probably won’t surprise anyone to learn that the settlement agreed between retail tycoon Sir Philip Green and the Pensions Regulator contains a big, fire-breathing example, complete with a forked trident. At least according the chairman of the Work and Pensions Select Committee. Frank Field has complained that the £363m settlement has a sting in its tail.
If the majority of largely younger scheme members with smaller pots take up the offer of a lump sum rather than a place in the “new” BHS scheme that has been topped up with £343m from Sir Philip, he
stands to get a substantial chunk of a £15m contingency fund returned to him (the total settlement amounted to £363m with £5m of it set aside to cover expenses). An analysis by the committee has also found that the people who will benefit most from the new BHS scheme are the 16 top BHS managers with the biggest pots. Sir Philip’s loyal lieutenants, in other words.
Its report holds that those lower down the corporate food chain will do comparatively less well out of the deal. The benefits they will accrue will not be as generous as they would have been had BHS remained in business. However, according to the committee, the headline figure that scheme members will receive 88 per cent of their promised benefits masks a great deal of variation. Owing to less generous indexation in the new scheme, some pensioners, the report says, will receive less than 80 per cent of what they would have received under the original BHS scheme rules.
That’s depressing, but hardly surprising. It’s still the case in Theresa May’s “Britain that works for everyone” that those at the top of the tree with the least need inevitably suffer the least pain when things get sticky. The problem facing the committee is that the deal is now done. The Pensions Regulator has dropped its action against Sir Philip and signed it off. Ditto the trustees. The suggestion that Sir Philip be forced to forfeit that Sir also appears to have evaporated. Funny that.
So there is nowhere for the committee to go. Morally, of course, Sir Philip should put anything left in that £15m after the lump sums have been accounted for into the fund. That way it could go towards providing better benefits for however many of the 19,000 or so BHS pension holders remain with the scheme. After all, it wasn’t just the top managers that worked hard for Sir Philip, made him a lot of money, did their damndest to make a success of BHS to the best of their abilities in the roles they had.
But since when did morality come into this? If morality had entered the picture at any stage, BHS would not have been sold to former bankrupt Dominic Chappell for £1, a man, remember, who is as close to being a retail guru as I am to taking the field for the British Lions with my mobility impairment. You shouldn’t expect however much remains of that contingency money to end up anywhere other than back with Sir Philip, unless he fancies kicking a bit over to charity for a bit of PR. This is still a country that works best for the few.