The Pensions Regulator has opened a probe into beleaguered department store chain BHS’s pension scheme, which is facing a deficit of £571m.
The group is considering whether to use its anti-avoidance powers to force former BHS owner Sir Philip Green to contribute to the debt.
It comes just hours after the 88-year-old retailer went into administration. Retail Week revealed on Friday that the business was on the brink of collapse after failing to raise adequate funds through planned store sales.
“We can confirm that we are undertaking an investigation into the BHS pensions scheme to determine whether it would be appropriate to use our anti-avoidance powers”
A spokesman for the Pensions Regulator said: “We can confirm that we are undertaking an investigation into the BHS pensions scheme to determine whether it would be appropriate to use our anti-avoidance powers.
“Such cases are complex. There is a clear process that must be followed and this can sometimes take a considerable amount of time.”
According to its website, the Pensions Regulator can use its anti-avoidance powers when it believes an employer is “deliberately attempting to avoid their pension obligations, leaving the Pension Protection Fund (PPF) to pick up their pension liabilities”.
Last month it emerged that the Pensions Regulator was in talks with Arcadia tycoon Green and could ask him to contribute £280m – 12.5% of his estimated net worth of £3.5bn – to the cost of the pension scheme.
PPF head of restructuring and insolvency Malcolm Weir added: “Following the BHS CVA (company voluntary arrangement) last month, we had been in discussions to find a solution that was in the best interests of the pension schemes and the company.
“However, following the BHS announcement that it has filed for administration the PPF will now work with the Pensions Regulator and other parties to secure the best outcome for the pension schemes. Members can be assured they are protected.”