Written by: Keith Tully
Published: 11th October 2016
The chief executive of the UK’s Pensions Regulator has called on the government to give her office more power to intervene in scenarios where companies are being sold while carrying large-scale pension deficits.
According to Lesley Titcomb, the regulator should be informed and given greater power to act where pension schemes are underfunded while businesses being bought and sold.
The issue has become a concern for law-makers as a result of the recent collapse and entry into administration of the retail group British Home Stores (BHS), which was sold for just £1 by its former owner Sir Philip Green while carrying an estimated £600 million pension deficit.
It is currently unclear how much of their pensions former BHS employees can expect to receive and the Pension Regulator has been criticised by the House of Commons’ work and pensions committee for not intervening on their behalf.
But the pensions watchdog has said that it did not have the power to scrutinise or play any role in overseeing the process that saw BHS sold for a nominal fee shortly before its collapse.
“We may need new powers in certain situations,” Ms Titcomb told the BBC.
“For example, where a company is being sold and the scheme is significantly underfunded, then it may be appropriate for the regulator to be told in advance about the transaction, and it may be appropriate for us to have the power to intervene in some way, which we don’t have at the moment.
“The vast majority of employers comply with the law and do the right thing. What we want to tackle is the particular limited set of circumstances where, for example, a sale can go ahead without us being aware of it.”
BHS fell into administration in April 2016 and dozens of its stores around the UK were subsequently closed down as its near 90-year history as a high street retailer came to an end.
A total of 11,000 people lost their jobs as a result of the company’s collapse, which represented the largest failure of a retail business in the UK since the entry into administration of Woolworths in 2008.