TPR Post Mortem Dissects Philip Green

In a rather blunt report summarizing the negotiations leading up to the deal in which BHS owner Sir Philip Green agreed to fund his defunct company’s pension plan with £363 million ($473 million), the UK’s The Pensions Regulator (TPR) portrays Green as having tried to shirk his responsibilities to his workers.

Under the terms of the settlement, which were agreed upon earlier this year, Green is providing funding for a new independent pension plan, which gives members the option of the same starting pension as they were originally promised by BHS, and higher benefits than they would get from the Pension Protection Fund (PPF).

“The agreement we have reached with Sir Philip Green represents a strong outcome for the members of the BHS pension schemes,” said TPR chief executive Lesley Titcomb said at the time.

But in an analysis of the agreement, TPR revealed that Green made several attempts to settle the dispute that were rejected for being insufficient. It also concluded that the main reason behind the sale of BHS “was to postpone BHS’ insolvency to prevent a liability to the schemes falling due while it was part of the Taveta group of companies ultimately owned by the Green family,” said TPP. It added that “the effect of the sale was materially detrimental to the schemes.”

TPR’s assessment appears to contradict Green’s public apology to BHS pensioners “for this last year of uncertainty, which was clearly never the intention when the business was sold in March 2015.”

The report also disputes what Green said at a parliamentary hearing last year in which MPs grilled him on BHS’ pension problems. Green told the MPs that “somebody was asleep at the wheel,” but that it wasn’t him, because he was not involved in he pension negotiations.  However, in its report, TPR said Green was “personally involved with the schemes, including investment issues, the 2012 valuation and recovery plan negotiations, and the appointment of new trustees and advisers.” TPR also referred to him as a key decision maker.

“The report highlights the lessons we have learned from this case about how we can regulate more effectively,” said Nicola Parish, executive director of frontline regulation. “We are already acting more quickly to intervene where we consider schemes to be underfunded, or where there are indications that employers may be avoiding their responsibilities.”