Arcadia Group: Pensions

Department for Work and Pensions written question – answered on 24th June 2019.

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Photo of Lord Myners Lord Myners Non-affiliated

To ask Her Majesty's Government whether the Pensions Regulator (1) regarded an additional payment into the Arcadia Pension Fund to be an adequate contribution to the deficit, and (2) supported the Company Voluntary Arrangements proposed by Sir Philip and Lady Green; and if so, why.

Photo of Baroness Buscombe Baroness Buscombe The Parliamentary Under-Secretary of State for Work and Pensions

The best support for a defined benefit pension scheme is an ongoing trading employer. Working with the shareholders, pension trustees and Pension Protection Fund, The Pensions Regulator were pleased to be able to agree a £310m package of support last week that would provide greater certainty for the Arcadia pension schemes. This comprises security to the value of £210m, together with the £100m in cash from Lady Green. The Pensions Regulator remain satisfied that the arrangement is the right one for members and the Pension Protection Fund in challenging circumstances and is equitable in the context of the wider Company Voluntary Arrangements process.

The Pension Regulator’s goal is to protect the interests of members of the Arcadia schemes as far as possible in these difficult circumstances. A successful outcome will mean ongoing Deficit repair contributions payments from the company, enabling the schemes to become fully funded in due course. Had the Company Voluntary Arrangement votes failed, or if the Company Voluntary Arrangements are successfully challenged, the position of the pension schemes would be/will be much less certain. Deficit repair contributions from Arcadia Group Limited, initially £25m per annum (paid in equal monthly instalments) and escalating in subsequent years, would cease. The amount recovered by the pension schemes would be significantly less in an uncontrolled insolvency than under the terms of the Company Voluntary Arrangement. On this basis The Pensions Regulator supported the Company Voluntary Arrangement.

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