Arcadia wants to halve the amount it pays into its pension pot every year as it seeks to restructure amid torrid high street trading conditions.
Sir Philip Green’s retail empire is proposing that it slashes the £50m it contributes to its pension fund each year to £25m. It made the suggestion to the Pensions Regulator and its pension trustees in recent weeks, Sky News has reported.
Arcadia’s pension deficit is around £550m on a conventional funding basis and £750m on a full buyout basis. Its scheme has thousands of members.
The move will have raised the hackles of the regulator as it comes two years after Green was found by MPs to have sold BHS to three-time bankrupt Dominic Chappell for £1 in a bid to avoid pension liabilities. He was forced to contribute up to £363m to the pension fund in the aftermath of the scandal.
The pension contribution reconfiguration comes as Arcadia attempts to restructure its business. It wants to close tens of stores across the country as part of its plan to restructure its business. It is not yet clear whether it will pursue a formal CVA, though it has been reported that Arcadia has tried to sweeten the deal by gifting landlords shares in the business.
A spokesman for Arcadia declined to comment.