Arcadia Group, owned by Sir Philip Green, is looking to delay contributions to its pension scheme as it struggles to hold on to cash through the Covid-19 crisis.
The parent company of brands such as Topshop, Wallis, Burton and Dorothy Perkins, is due to pay £25m annually into its pension scheme for three years.
The payments were agreed by the Pensions Regulator last year as Arcadia negotiated seven company voluntary arrangements (CVA) that allowed it to close 48 stores and pay reduced rent on many others.
Pensions
Why offering pensions advice is good for society and business
Never mind the gender pay gap: here’s the gender pensions gap
The regulator agreed to halve the pensions contribution from £50m annually to £25m as long as Green’s wife, Lady Tina, paid in instalments also of £25m a year from her own wealth, plus an extra one-off £25m payment.
Arcadia has said that Monaco-based Tina Green will continue to make her contributions on time.
With the deferred payments, the pension contributions have been halved, with agreement from The Pensions Regulator (TPR).
The news comes after the clothing sector publication Drapers reported that Arcadia had informed suppliers that it would be cancelling all orders and extending payment terms, to protect itself during the coronavirus outbreak.
Labour MP Rachel Reeves, chair of the Business, Energy and Industrial Strategy Committee, said businesses would “need to answer for their decisions during this pandemic and whether they did the right thing by workers and pension holders”. She warned businesses against using the Covid-19 outbreak as an excuse to reduce pension provision for employees.
John Ralfe, who has previously advised MPs investigating the collapse of Green’s defunct retail chain BHS, said there was no reason to leave the scheme “short-changed”.
He added that Lady Tina, given her net worth, should bring forward her payments so the pension scheme received the same amount as previously.
A spokesperson for The Pensions Regulator (TPR) said: “We understand this is an extremely difficult time for many businesses. Although the full picture of the coronavirus’s impact is still developing, TPR has seen an increase in contact from schemes seeking to defer their deficit repair contributions since the beginning of the Covid-19 pandemic.”
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
.
