The Pensions Regulator has reached a £363m settlement with former BHS boss Philip Green to plug the deficit in the collapsed retail chain’s pension scheme.
The funds will go towards a new, independent pension scheme will offer the same pension as when employees started with BHS.
19,000 members will be entitled to higher benefits than if the scheme fell on the Pension Protection Fund lifeboat.
TPR has agreed to not take further enforcement action against Green, but enforcement action will continue over Dominic Chappell and Retail Acquisitions Limited, which purchased BHS off Green.
TPR chief executive Lesley Titcomb says: “The agreement we have reached with Sir Philip Green represents a strong outcome for the members of the BHS pension schemes. It takes account of the interests of both pensioners and the PPF, and brings a welcome level of certainty to present and future pensioners.
BHS scheme members can transfer to the new scheme, but can also take a lump sum payment if they have pots of less than £18,000 or remain in their current scheme.
PPF chief executive Alan Rubenstein says: “This settlement for the BHS pension schemes, agreed between Sir Philip, TPR and the trustees, with the involvement of the PPF, relieves the PPF’s levy payers of the cost of meeting the initially reported shortfall.
“TPR will be monitoring the new scheme and members will be protected by the PPF.”
The settlement puts to an end potential enforcement action from TPR after it issued warning notices last November than planned to weigh up regulatory action after an anti-avoidance investigation.
The BHS pensions deficit has been estimated at £571m.