// Arcadia Group to put a pause on payments to its pension scheme for 3 months
// The decision aims to preserve liquidity amid temporary store closures from lockdown
// The Pensions Regulator is reportedly aware of Arcadia’s deferral plan
Sir Philip Green paused payments to its pension scheme for at least three months to help conserve cash during the coronavirus crisis.
According to Sky News, Arcadia’s pension trustees have agreed to the deferment although the decision could cause concerns given the company has had a prior disagreement with the Pensions Regulator.
The retail empire – which operates fashion chains Topshop, Dorothy Perkins, Burton, Wallis, Evans and Miss Selfridge – decided to postpone its pension payments in order to preserve liquidity amid temporary store closures from lockdown and unprecedented uncertainty due to the Covid-19 pandemic.
READ MORE:
- Coronavirus: Arcadia cancels all orders until further notice
- Coronavirus: Arcadia ends fixed-term employment contracts
Arcadia is also in the middle of a major restructure via several CVAs, which were approved last year on the condition that Green injected an additional £25 million annually into the company’s pension scheme, equating to monthly payments of over £2 million.
These contributions have now be halted for at least three months, or while the shutdown remains in place.
Sky News indicated that The Pensions Regulator was aware of Arcadia’s deferral plan.
Other measures that Arcadia has taken to help mitigate the financial impact of the coronavirus pandemic include informing suppliers that all orders will be cancelled until further notice and payment terms would be extended by 30 days.
Arcadia also wrote to employees last week to inform them it would end fixed-term employment contracts early as a result of the pandemic.
The contract termination covers teams across the fashion retail giant, including those in marketing, creative, store planning and visual merchandising.
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