Yahoo Finance Lady Tina Green puts £50m into Arcadia pension fund
Sir Philip Green's family is to make a £50m payment into Arcadia's stricken pension fund 10 months earlier than planned as calls grow for the entrepreneur to shore it up further using his remaining fortune.
The decision was announced shortly after business secretary Alok Sharma asked the Insolvency Service to examine whether the conduct of Arcadia's directors led to problems at the retirement scheme, which has an estimated £350m deficit.
Sir Philip's wife Tina, the ultimate owner of the family's retail empire, pledged to speed up the last tranche of a previously promised £100m injection into the fund. She has already paid £50m and the remaining £50m was due in September next year.
If the scheme's black hole is not plugged, its 10,000 members will fall into the Pension Protection Fund lifeboat and lose up to 20pc of their retirement income. The firm's collapse this week also puts 13,000 jobs at risk.
Lady Green will make the final payment in the next seven to 10 days, an Arcadia spokesman said.
However, the funds do not represent new money and the family may be urged to pledge even more. They pumped £363m into the BHS pension scheme in 2017 following the department chain's collapse after Sir Philip sold it to former bankrupt Dominic Chappell, now a convicted tax evader.
John Ralfe, a pensions expert and a witness during the BHS scandal, said: "I wouldn’t be popping bottles of champagne just yet.
“The [acceleration of payment] would be part and parcel of the original agreement she [previously] signed. This is the first and easiest piece of the jigsaw. It takes the deficit [down] to about £300m.”
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Former pensions minister Ros Altmann welcomed the advance payment but warned that savers were still likely to suffer.
Baroness Altmann said: "[Lady Green] has fulfilled what's asked of her and it is hard to see that she has any further regulatory or legal obligations to the scheme."
Stephen Timms, chairman of the Commons work and pensions committee, said: "The Green family may consider that they have fulfilled their legal duties to the members of Arcadia’s pension schemes.
"But the extent of the moral duty they still owe those people will only become clear once the funding levels of the schemes have been fully assessed by the Pension Protection Fund."
The Greens made their announcement after Mr Sharma wrote to the Insolvency Service urging it to pay close attention to Arcadia, in a move that Prime Minister Boris Johnson announced in the House of Commons.
In a letter to Insolvency Service boss Dean Beale, Mr Sharma said: “Given the significance of this case and its implications for thousands of suppliers, pensioners and employees, I would be grateful if you would review this report rigorously.
“If you decide that there are grounds for an investigation, I would ask that it looks not only at the conduct of directors immediately prior to and at insolvency, but also whether any action by directors has caused detriment to creditors or to the pension schemes.”
Administrators must provide the Insolvency Service with a report within three months after taking control of a business. The agency then decides whether there are grounds for further investigation.
Separately, Sky News reported that a City financier is in talks with Arcadia’s pension trustees, who are led by advice company Dalriada, about a deal that would boost savers' payouts.
Mr Johnson's former adviser Edi Truell has held discussions in the past few days about a transaction that would result in Arcadia's 9,500 pensioners being absorbed into his firm Pension SuperFund (PSF).
In a deal with the Pensions Regulator last year, trustees of Arcadia's pension schemes were granted security over £210m of the company's assets - giving them a claim on any money recovered now it has gone bust.
These include Corinthian House on Tottenham Court Road, which is up for sale, and the property at 214 Oxford Street, both in central London.
It is thought that the security linked to some of Arcadia’s buildings has fallen in value as the pandemic has upended the commercial property market.
Arcadia also said it would inject a further £75m of company money into the pension scheme. It paused these payments for six months when the pandemic hit.
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