Sir Philip Green‘s pension deficit woes continue as it has been revealed that Arcadia Group‘s has risen to almost £1 billion.
As part of the ongoing investigation into the collapse of BHS, MPs published documents yesterday revealing that the former BHS owner‘s Arcadia Group had a combined pension deficit of £993 million in March last year.
This valuation takes into account the two separate schemes the Topshop and Dorothy Perkins owner uses: one for senior executives and another for the rest of the staff.
It was calculated on a buyout basis, meaning it covers the cost of winding up the scheme and securing its benefits with an insurer.
The news comes just weeks after Green came to an agreement to pay a lump sum of £363 million into the BHS pensions deficit, which stood at £571 million when the department store chain collapsed last year.
Green has laid out a strategy to tackle the growing deficit, which is estimated to cost £565 million to maintain alongside the retail business, by paying in £50 million into the scheme every year.
This will rise to £54.5 million in 2019 and is targeted at eliminating the deficit in the next 10 years.
Chairman of the work and pensions committee Frank Field MP has criticised Green for favouring Arcadia group‘s deficit over that of BHS.
“Not long after he refused to shift on a ludicrous 23-year recovery plan for the BHS scheme, he agreed a 13-year plan for Arcadia with well over double the deficit contributions,” Field said.
“I imagine Green would say Arcadia could afford it because it was profitable, whereas BHS was not. But it is clear that all his companies are run as one large tax-efficient empire in the family interest.”
According to the recently released documents 59 per cent of the executive pension scheme is currently funded, while the main scheme is just 55 per cent funded, both down from 63 per cent four years ago.