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Written Question
Arcadia Group: Pensions
Wednesday 9th December 2020

Asked by: Lord Myners (Crossbench - Life peer)

Question to the Department for Work and Pensions:

To ask Her Majesty's Government what plans they have, if any, to ask the Pensions Regulator to investigate (1) the competence, (2) the conduct, and (3) the decisions, of the trustees of the various Arcadia pensions schemes.

Answered by Baroness Stedman-Scott

The Pensions Regulator is an independent body. The Honorable Lord can refer back to the statement made by the Secretary of State for BEIS in December. The Pensions Regulator has a range of powers to protect pension schemes, and it works closely with other organisations who are addressing the Arcadia business. The Pension Schemes Bill currently progressing through Parliament includes measures to enhance these powers and includes improvements to assist with investigations.


Written Question
Pensions
Wednesday 8th July 2020

Asked by: Lord Myners (Crossbench - Life peer)

Question to the Department for Work and Pensions:

To ask Her Majesty's Government what assessment they have made of the Social Market Foundation's proposal in Investing in Britain's future: Financing and funding infrastructure after the Coronavirus crisis, published on 15 June, to create pension superfunds to invest in infrastructure and support economic recovery; and when they expect to report on progress made in pension fund consolidation, after consultation with relevant stakeholders.

Answered by Baroness Stedman-Scott

On 18 June, The Pensions Regulator published its interim regime for Defined Benefit pension superfunds, which is effective immediately. This is a significant step in progressing this policy area which has the potential to benefit employers, savers and wider society.

The government recognises the potential large superfunds have to deploy significant capital in the investment markets that could benefit the wider economy. We expect superfunds will operate a well-diversified portfolio which may include investment in suitable infrastructure projects where the long term nature of returns are suited to long term pension liabilities.

A written statement on this subject has now been published and a copy is attached.


Written Question
Arcadia Group: Pensions
Tuesday 16th June 2020

Asked by: Lord Myners (Crossbench - Life peer)

Question to the Department for Work and Pensions:

To ask Her Majesty's Government whether Ministers or senior officials at the Department for Work and Pensions have had meetings in the last 3 months with the trustees, scheme sponsors or advisers to Arcadia Group pension schemes in respect of funding and funding commitments supporting these schemes.

Answered by Baroness Stedman-Scott

There have been no meetings between Ministers or senior officials at the Department for Work and Pensions and trustees, scheme sponsors or advisers to the Arcadia Group pension schemes in respect of funding and funding commitments supporting these schemes.


Written Question
Arcadia Group: Pensions
Monday 24th June 2019

Asked by: Lord Myners (Crossbench - Life peer)

Question to the Department for Work and Pensions:

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.

Answered by Baroness Buscombe

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.


Written Question
Arcadia Group: Pensions
Monday 24th June 2019

Asked by: Lord Myners (Crossbench - Life peer)

Question to the Department for Work and Pensions:

To ask Her Majesty's Government why the Pensions Regulator has allowed the owners of Arcadia Group to phase their contribution to address that company’s pension deficit over a period of time instead of a single up-front payment; whether the Pensions Regulator is using financial advisers to determine whether Arcadia’s business plan will eventually cover the deficit; and if so, who are those advisers.

Answered by Baroness Buscombe

The pensions framework established by Parliament in the Pensions Act 2004 sets out that ongoing employers may address the funding of their scheme deficits over a reasonable period of time. This responsibility falls on the company rather than its owners, other than where The Pensions Regulator has used its anti-avoidance powers. This approach of spreading funding of deficits was established to balance the needs of schemes with those of their sponsoring employers.

The Arcadia trustees and the Arcadia group took an approach which was similar to many other schemes and employers in establishing recovery plans to address their schemes’ deficits over a number of years. In response to a request to vary those recovery plan payments, made in conjunction with the Arcadia Group’s Company Voluntary Arrangements proposals, The Pensions Regulator, working alongside the trustees and the Pension Protection Fund, has negotiated robustly to secure an enhanced package of support for the pension schemes in connection with a successful Company Voluntary Arrangement, worth significantly more than would be received if the Company Voluntary Arrangement is not successful and Arcadia Group Ltd becomes insolvent. This represents appropriate protection, in challenging circumstances, and is equitable in the context of the wider Company Voluntary Arrangements process.

In assessing the turnaround plan presented by Arcadia, The Pensions Regulator has been informed by the analysis carried out by professional advisers to the trustees. The Pensions Regulator has considerable expertise in restructuring situations and this includes people in its regulatory teams with a background working in big chartered accountancy firms and restructuring operations in banks.


Written Question
Arcadia Group: Pensions
Wednesday 19th June 2019

Asked by: Lord Myners (Crossbench - Life peer)

Question to the Department for Work and Pensions:

To ask Her Majesty's Government what plans they have to review (1) decisions taken by the trustees of the Arcadia Group Pension Scheme which may have contributed to an aggregate deficit of liabilities over assets of some £700 million, (2) the oversight of the Arcadia Scheme by the Pensions Regulator, and (3) the Pensions Regulator's use of its powers in relation to the Arcadia Scheme.

Answered by Baroness Buscombe

The Government cannot intervene with the decisions taken by trustees of pension schemes.

The Pensions Regulator is an independent body, and as such the Government cannot comment on any cases dealt with by the Regulator. Due to this, the Government does not have plans to review the oversight exercised over the Arcadia scheme, or the use of powers in relation to the scheme.


Written Question
Arcadia Group: Pensions
Tuesday 18th June 2019

Asked by: Lord Myners (Crossbench - Life peer)

Question to the Department for Work and Pensions:

To ask Her Majesty's Government whether Ministers or officials have (1) written to, (2) had any meetings with, or (3) communicated in other forms with, Sir Philip Green, Lady Christina Green or the Pensions Regulator in connection with the Arcadia Group Pension Scheme.

Answered by Baroness Buscombe

Neither Ministers nor officials have written to, had meetings with, or communicated in other forms with Sir Philip Green or Lady Christina Green.

Ministers and officials have quarterly meetings with the Pensions Regulator, but not specifically concerning Sir Philip Green or the Arcadia Group. This is because the Pensions Regulator is an independent body, and as such the Government cannot intervene or influence its actions. The Regulator also keeps DWP officials informed about its work in monitoring pension schemes.


Written Question
Eastman Kodak: Pensions Protection Fund
Tuesday 14th May 2019

Asked by: Lord Myners (Crossbench - Life peer)

Question to the Department for Work and Pensions:

To ask Her Majesty's Government who is responsible for oversight of matters regarding the Pensions Protection Fund (PPF) and Kodak; and whether they plan to commission an independent review of the handling of Kodak by the PPF and the Pensions Regulator and the advice received by both.

Answered by Baroness Buscombe

The Pension Protection Fund is a statutory public corporation led by its Board and accountable to Parliament through the Secretary of State for the Department for Work and Pensions.

The original decision in the Kodak case, which provided savers with the potential to receive benefits above Pension Protection Fund levels, was finely balanced and carefully assessed with the benefit of the due diligence carried out for the trustees. Regulated Apportionment Arrangements, a restructuring mechanism which allows a financially troubled employer to detach itself from its liabilities in respect of a defined benefit scheme, are rare and The Pensions Regulator will only agree to them if stringent criteria are met, with entry into the Pension Protection Fund the expected outcome, and the Pension Protection Fund must not object to the Regulated Apportionment Arrangements. The Pensions Regulator published a section 89 regulatory intervention report in November 2014 describing in detail the considerations leading to the decision in this case.

As a condition of approving the successor Kodak pension scheme in 2014, a memorandum of understanding was put in place giving The Pensions Regulator the power to closely monitor the progress of the scheme and if necessary trigger its wind up. This has allowed The Pensions Regulator, with the Pension Protection Fund, to remain actively involved in discussions about the scheme’s future. Due to underperformance of the underlying business it was concluded that the scheme would be unable to meet its long term funding requirements. Action has therefore been taken to bring the scheme into a Pension Protection Fund assessment period which commenced on the 25 March 2019.

Specialist firms with extensive Pension Protection Fund experience have been brought in to manage the administration of the pension scheme and to oversee its efficient passage through the assessment process.

Whilst the Kodak case is a significant claim, the Pension Protection Fund remains in a robust financial position. In its last reported accounts, the Pension Protection Fund had a £6.7 billion reserve and is currently on track to reach its funding objective. There has been no immediate impact on the Pension Protection Fund Levy arising from this case. The Pension Protection Fund aims to collect £500m in levy in 2019/20 which is £50m lower than it aimed to collect in 2018/19.

The Pensions Regulator aims to learn from every major pensions restructuring case and has refined its approach to complex pension restructurings in light of the lessons learned in the Kodak case and successive cases. A letter was sent on the 17th October 2018 from Lesley Titcomb, the then Chief Executive Officer (CEO) of The Pensions Regulator, addressed to the Chair of the Work and Pensions Select Committee, Rt Hon Frank Field MP, summarising the lessons learnt in the Kodak case.


Written Question
Arcadia Group: Pensions
Thursday 4th April 2019

Asked by: Lord Myners (Crossbench - Life peer)

Question to the Department for Work and Pensions:

To ask Her Majesty's Government whether they have made any representations to, or met, the Pensions Regulator in the last three months in connection with Arcadia Group.

Answered by Baroness Buscombe

The Pensions Regulator carries out its functions independently. The Department has not made any representations to the Pensions Regulator in relation to the Arcadia Group in the last three months.


Written Question
Food: Prices
Monday 11th March 2019

Asked by: Lord Myners (Crossbench - Life peer)

Question to the Department for Work and Pensions:

To ask Her Majesty's Government what plans the Department for Work and Pensions has to establish a hardship fund for those most affected by a rise in food prices as a result of Brexit.

Answered by Baroness Buscombe

The benefit system provides support for eligible claimants on low incomes or no incomes to claim for financial support for daily living expenses.

As part of the process to ensure our orderly exit, we continue to monitor the effects of Brexit on the economy. Leaving the EU with a deal remains the Government’s top priority. That is why we are redoubling our efforts to reach a negotiated deal that Parliament can support. As the Prime Minister has made clear, the best way forward is for the UK to leave the EU in an orderly way with a good deal and the Government is working to deliver legal certainty on the UK’s future relationship with the EU. Following our exit from the European Union, we are committed to maintaining a close and collaborative relationship with the EU.