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Financier Truell targets deal to boost Arcadia pensioners’ payouts

Written by on 02/12/2020

A leading City financier is in talks with Arcadia’s pension trustees about a deal that would boost the payouts of thousands of scheme members following the collapse of Sir Philip Green’s Topshop empire.

Sky News has learnt that Edi Truell, a former adviser to Boris Johnson, has held discussions in recent days about a transaction that would see Arcadia’s 9,500 pensioners absorbed into the Pension SuperFund (PSF).

The talks are at an early stage, and come amid intense political scrutiny of the future of Arcadia’s pension schemes following Sir Philip’s controversial history at BHS, the department store chain he used to own.

Pedestrians walk past a temporarily closed-down Topshop store on Oxford Street in London on November 26, 2020. - Britain's government on Wednesday unveiled plans to slash the foreign aid budget to help mend its coronavirus-battered finances, prompting one minister to quit and defying impassioned calls to protect the world's poorest people. (Photo by DANIEL LEAL-OLIVAS / AFP) (Photo by DANIEL LEAL-OLIVAS/AFP via Getty Images)
Image: Topshop, along with Arcadia’s other brands, are trading as normal

Mr Truell and senior colleagues are understood to believe that there is potential for Arcadia’s pension scheme members to receive higher benefits after a deal with his company than they will be in line for from the Pension Protection Fund (PPF) – the industry-funded lifeboat.

Pension experts have estimated that the Arcadia schemes have a so-called PPF deficit of about £350m, although analysts say the deficit on a full insurance buyout basis could be in the region of the £571m figure which was associated with BHS after its collapse in 2016.

Sir Philip eventually paid up to £363m to resolve the BHS pension crisis, although it is doubtful that he will be legally obliged to pay any more into the Arcadia schemes following a rescue deal for the Topshop-to-Burton group struck last year.

“Pension SuperFund can confirm that it is is contact with the trustees of the Arcadia pension funds. Any transaction would subject to their agreement, the Pension Regulator and/or PPF clearance, as the case may be,” Mr Truell said.

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Arcadia goes into administration

He added that the situation was “somewhat complicated by there being four different pension funds, rather than a single scheme, so that the overall deficit numbers being bandied about may conceal differing funding levels”.

“With those caveats in mind, Pension SuperFund is currently of the view that it can offer a safe and secure home to the 9,500 pension members in the Arcadia pension funds, not only giving them a secure base pension but the very real prospect of sharing in the outperformance of the Pension SuperFund in the years to come,” Mr Truell added.

In a letter to the chief executive of The Pensions Regulator this week, Stephen Timms, who chairs the Commons work and pensions select committee, sought clarity on previous guidance about pension superfunds.

The new vehicles, such as the one founded by Mr Truell, remain in their infancy, and any deal with Arcadia’s trustees would be by far the most ambitious attempted to date.

Mr Truell, a former pensions adviser to Boris Johnson when he was the London mayor, has long been an advocate for defined benefit pension consolidation in the public and private sectors.

He has argued that such combined pools benefit from significant cost savings and avoid the duplication which curtails returns for thousands of individual schemes.

A spokesman for Arcadia’s pension trustees said they were working with the regulator and the PPF “to fully understand future plans for the business and to ensure that members’ interests continue to be protected”.

 Sky News

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