personal finance

Pressure builds on Philip Green over future of Arcadia pension scheme


MPs and unions have piled pressure on Sir Philip Green to “make good” on promises to 10,000 members of the Arcadia pension scheme as his retail empire edged towards collapse, potentially as soon as Monday.

The long-struggling Arcadia group, whose brands include Topshop, Burton and Wallis, was hit hard by shutdowns this year and is on the brink of being the UK’s biggest retail casualty of the pandemic.

If Sir Philip’s group enters administration, its pension scheme would be taken on by the Pension Protection Fund. Arcadia’s pension deficit, which is estimated to be as much as £350m, raises the risk that some members who are under the scheme’s normal retirement age could lose 10 per cent of their benefits.

Stephen Timms, the Labour chair of the work and pensions select committee, called on Sir Philip to ensure the scheme is on a sound footing to ensure Arcadia staff are not short-changed.

“This is a dreadful time for Arcadia staff to be worrying about their jobs, and their pensions,” said Mr Timms. “Whatever happens to the [Arcadia] group, the Green family must make good the deficit in the Arcadia pension fund. I shall be writing to The Pensions Regulator on Monday to underline the importance of securing the interests of pension scheme members.”

Sky News reported over the weekend that Mike Ashley, owner of Frasers, had offered Sir Philip Green a £50m lifeline to help keep Arcadia afloat.

But Mr Timms said: “Mike Ashley did not take on the pension obligations on acquiring House of Fraser so his reported interest will increase staff concern.”

In 2019, the regulator and scheme trustees agreed to a rescue plan that allowed Arcadia to halve its annual pension contributions from £50m to £25m. As part of this deal, Lady Green also pledged to pay £100m of her own money to the pension schemes.

Arcadia paused its monthly pension payments last March because of business disruption caused by Covid-19 but these payments have since resumed.

The group also agreed to grant the scheme trustees security over 214 Oxford Street, a large building facing London’s Oxford Circus that houses the flagship Topshop store among others. The building is thought to be worth at least £400m, although there is a £310m mortgage against it and the pandemic has weighed on commercial property.

A spokesperson for the Arcadia Pension Schemes said: “The trustees are aware of recent media speculation about the future of Arcadia; they are consulting closely with the company and will continue to keep members updated.”

The Pensions Regulator did not immediately respond to a request for comment.

Sir Philip could not be reached for comment. He has been excoriated by parliament’s work and pensions committee over the parlous state of BHS’s pension scheme, which was £571m in deficit when he sold the group for just £1 in 2015.

BHS collapsed a year later and Sir Philip, after a barrage of political criticism and pressure from the pension regulator, contributed an additional £363m to the pension.

Frances O’Grady, the TUC general secretary, noted that Sir Philip had already been condemned by MPs for the “systematic plunder” of BHS. “Weak corporate governance rules seem to be allowing history to repeat itself,” she told the Observer.

Additional reporting by Jonathan Eley



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