Sir Philip Green refused to contribute more than £10m a year to BHS’s pension scheme despite its clearly growing deficit.
Margaret Downes, the former chairman of the BHS pension trustees, told Parliament on Wednesday that despite a growing deficit in the BHS pension fund, then-owner Sir Philip Green refused to pay more than £10m a year towards its recovery.
“From the very beginning of us working on the 2012 valuation it was made clear to us that the maximum amount that would be given by the sponsor (Arcadia) was £10m a year,” said Downes.
“They never veered from that. No matter how much we addressed endeavouring to increase that either with Philip Green or with Paul Budge (Arcadia’ finance director), we could not get them to move away from that.”
However, Downes went on to say that she believed “at heart” Green had “a caring approach to the 22,000-odd members” of the scheme.
“I think he expressed at that stage that if funds were available and if BHS Limited was in a position to contribute to the pension fund then we would be very happy that would happen.”
Keeping in mind that over the 13 years that Downes oversaw the pension trustees Green and others took more than £580m in dividends, rent and interest payments from BHS, and given that Green was willing to offload the business and its deficit for £1 in 2015, this “caring approach” would need some clarification.
Chris Martin, Downes’ successor, told MPs he had been “very, very disappointed” when Arcadia stopped a plan to restructure the pension scheme in 2014. He said he had been forced to “derisk” investments in the pension scheme after Arcadia withdrew the restructuring plan, known as Project Thor.
“We had to behave like we had no covenant,” Martin said on Wednesday.
It is hoped that administrators for BHS will select a buyer on Thursday, as otherwise the chain is likely to go into liquidation.