Sir Philip Green may have to pay £1bn to resolve the problems facing the BHS pension scheme under proposals tabled by MPs.
The work and pensions committee, which is chaired by Labour MP Frank Field, has called for the government to introduce a “nuclear deterrent” to stop companies or individuals trying to avoid their responsibilities to pension schemes.
This deterrent would be a fine from The Pensions Regulator (TPR) worth three times the amount it believes a company or individual should contribute towards filling the deficit in a pension scheme. Given that the regulator is understood to be seeking £350mn from Green for the BHS pensions scheme, this means it could threaten the billionaire tycoon with a charge of about £1bn.
The deterrent is part of a package of measures proposed by the parliamentary committee to avoid another BHS scandal.
BHS collapsed into administration in April, leading to the loss of 11,000 jobs and leaving a £571mn deficit. The regulator has started legal proceedings against Green and Dominic Chappell, the former owners of BHS, in an attempt to fill the deficit. They collected millions of pounds from the retailer. Field said: “It is difficult to imagine (TPR) would still be having to negotiate with Sir Philip Green if he had been facing a bill of £1bn, rather than £350mn. He would have sorted the pension scheme long ago.”
As well as threatening punitive fines, the MPs said TPR must become a “nimbler, more proactive regulator”. They said the regulator must consider recovery plans for pension schemes in deficit that last more than 10 years as “exceptional” and that it should approve every major corporate transaction.
These powers would have allowed the regulator to block a 23-year plan drawn up by Green for the BHS pension scheme while he owned it in 2012, and stop the sale of the retailer to Chappell, a three-time bankrupt.
In addition, the committee wants pension trustees to have the power to negotiate a restructuring of struggling schemes that could result in better outcomes than entering the Pension Protection Fund, where benefits are cut by at least 10%. The PPF, a government-backed lifeboat scheme, is funded by a levy on all defined benefit pension schemes. The MPs say that good corporate behaviour could be rewarded in future by paying less into the PPF.
Field added: “The measures we set out in this report are intended to reduce the chance of another scheme going down the BHS route.”


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