The former owner of British Home Stores (BHS) is to pay “up to £363m” (€425m) to the bankrupt chain’s two pension funds, the UK’s Pensions Regulator (TPR) has announced.

The arrangement will mean members of the two schemes who are yet to retire will not have to transfer to the Pension Protection Fund (PPF), avoiding a 10% cut to their benefits. TPR has ended its enforcement action against Sir Philip Green, whose Arcadia Group sold BHS in 2015. BHS declared bankruptcy last year.

TPR has set up a new pension scheme, to be overseen by three independent trustees, and the existing schemes’ 19,000 members will be given the option to transfer in. The regulator said benefit payments in the new arrangement would be “on average” closer to those from the existing BHS schemes, and better than the payments available from the PPF.

Pensions built up prior to April 1997 will increase at 1.8% a year, the regulator said. The PPF does not apply increases for pensions accrued before April 1997. Some members will have the option of a lump sum transfer, and members will be permitted to transfer to the PPF if they prefer.

In addition, members will receive back payments dating back to March 2016 when BHS filed for bankruptcy.

The £363m (€424m) includes £343m in funding for the new scheme and a separate £20m to cover expenses and implementation costs.

TPR chief executive Lesley Titcomb said: “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.

“Throughout our discussions with Sir Philip and his team, we have always been clear that we were determined to achieve the right outcome for members of the schemes both in terms of the amount and the structure of the settlement.”

Setting up the new scheme “is likely to take a number of months”, TPR said in a document outlining the BHS settlement.

Alan Rubenstein, chief executive of the PPF, said the arrangement “relieves the PPF’s levy payers of the cost of meeting the initially reported shortfall. The Pensions Regulator will be monitoring the new scheme and members will be protected by the PPF”.


The BHS pension saga became a flagship case for defined benefit (DB) scheme reform last year. The Work and Pensions Committee, a group of members of the UK lower house of parliament, last summer published a damning report into the chain’s collapse.

The committee – chaired by Frank Field – said at the time that Sir Philip “gave insufficient priority to the BHS pension scheme over an extended period” and “contributed substantially to the demise of BHS”. During the inquiry by the committee, Sir Philip had promised to help fix the BHS schemes, which were both in deficit.

BHS was also cited in the government’s recent consultation on corporate governance reform , with the Work and Pensions Committee calling for trustees of large pension funds to be subject to the UK’s corporate governance code.

TPR is still investigating the roles of Retail Acquisitions Limited, which bought BHS from Arcadia, and its director Dominic Chappell.