In an effort to prevent another BHS-style pension crisis, Sir Philip Green has agreed to double the amount paid into Arcadia Group‘s pension fund every year, stemming the growing deficit.
Following his agreement last week to pay up to £363 million to help plug the £571 million pension deficit of the collapsed BHS chain, Green will now pay £50 million a year into his fashion empire‘s scheme. This is double the previous £25 million.
Green‘s Arcadia Group, which owns fashion retailers such as Topshop, Dorothy Perkins and Miss Selfridge, racked up a deficit in its pension fund of £190 million for the year to August 2015. This number is expected to have grown significantly since.
Further details of the new agreement or the current figure of Arcadia‘s deficit have not been disclosed, but it is understood the plan will last less than 10 years.
“The company has signed a new contribution arrangement with trustees and has already started payment of an additional contribution over and above the previous £25m a year,” Green stated.
Despite efforts to stem the tide of another pension controversy, BHS‘s pension woes are yet to be solved.
The Serious Fraud Office is still considering an investigation into BHS, while both the Insolvency Service and the Financial Reporting Council are continuing to investigate.
Victims of the pension scheme debacle will still see a reduction of about 18 per cent in their pension value, although this has shrunk since Green‘s deal from around 25 per cent.
Dominic Chappell has been called upon by the Pensions Regulator to pay £17 million towards the deficit, after it emerged his company “plundered” £25 million from BHS in the 13 months he owned it after acquiring it from Green in March 2015 until its collapse in April last year.
Chappell has vowed to fight the request.