Field: Sir Philip Green up to 'old tricks again' with Arcadia

It was spurred into action by reports, initially from Sky News, that Sir Philip Green proposed to halve the pension scheme recovery payments, from £50m a year to £25m a year, as part of a planned restructuring of the Arcadia Group, which includes the retail business, Topshop.

The chair of the committee, Frank Field, has written both to Arcadia and to the Pensions Regulator demanding answers. This includes new questions to the Arcadia group pensions manager Margaret Hannell and the regulator about the reported proposal.

In a separate statement on the parliament UK website, Field goes for the jugular: "Sir Philip was dragged to a costly out-of-court settlement with TPR, no more than he should have paid to his loyal employees’ pension scheme in the first place, no thanks to him and little to TPR.”

He noted that, “even before the latest scandal over his treatment of colleagues and employees, Sir Philip had proven himself no knight of British retail – quite the opposite”.

Mr Field added: “Does he really think he’s going to get away with his old tricks again? Run the business down, pocket whatever cash is left, stiff the pensioners and sail off on the Lionheart leaving employees, pension schemes and his long-suffering creditors in the lurch? Not if we have anything to do with it."

In a letter to Frank Field dated March 21, Ms Hannell wrote that deficit contributions totalling £50m a year are currently being paid.

“The actuary’s most recent 2018 fund update indicated that the scheme’s aggregate solvency deficits had reduced to £727m, combined Technical Provisions deficits reduced to an estimated £537m as at the same date,” she wrote.

The scheme is currently undergoing its triennial review as at March 31 2019.

Denise Fawcett, a partner at law firm BDB Pitmans, said it is not unusual for companies in distress to decrease contributions to the pension fund and extend the period over which any deficit is paid.

"If this ensures the ongoing support of the scheme by the employer then this can be a good thing," she said.

"However, if rescue is unlikely and the scheme's position will merely worsen then the trustees of the scheme are unlikely to agree to a reduction in contributions," according to Ms Fawcett. 

She said that if the employer does not survive, then the Pension Protection Fund will have to take on the burden of the pension plan.

"If its position will worsen in circumstances where insolvency is likely then the trustees may need to consider whether they can call upon the company to pay the whole of the scheme debt, thereby forcing it into an insolvency process," she added.