Pension Protection Fund and Pensions Regulator

Lord Foulkes of Cumnock Excerpts

Thursday 13th July 2017 Lords Chamber

[Baroness Buscombe]

My Lords, I too read the article in the Financial Times this morning. The truth is that these pension freedoms are proving very popular. However, they raise important issues around the operation of the market and how we support consumers, so we will be working with the Financial Conduct Authority on the next steps to address this issue.

[Lord Foulkes of Cumnock (Lab)]

My Lords, the mention by my noble friend Lord McKenzie of irresponsible employers reminded me of Sir Philip Green. Can the Minister bring us up to date on the position of the BHS pensioners and what the Government are doing to help them?

[Baroness Buscombe]

My Lords, the financial settlement regarding BHS is valued in total at £363 million, and £343 million has already been placed in a fully independent escrow account to fund a new scheme. The settlement with Sir Philip Green for the British Home Stores scheme is the largest of its kind the Pensions Regulator has reached to date. Indeed, in total, the Pensions Regulator has secured more than £1 billion for pension schemes through the use of settlement in avoidance cases. Existing members of the scheme now have three options: transfer to the proposed new pension scheme, opt for a lump sum payment, if eligible, or remain in their current scheme, which is expected eventually to transfer to the Pension Protection Fund. However, the new scheme will be a fully independent trust with independent governance and trustees. Neither Sir Philip Green nor the Arcadia Group will be involved in the management of the scheme. In the highly unlikely event that the new scheme fails, members can rely on the Pension Protection Fund.