LONDON (REUTERS) - Britain's pensions regulator has agreed a cash settlement worth up to £363 million (S$632 million) with billionaire retailer Philip Green, the former owner of collapsed department store chain BHS, it said on Tuesday (Feb 28).
The regulator, which formally launched legal action against Green to plug a hole in two BHS pension funds in November, said the deal had the support of the trustees of the schemes which have 19,000 members.
"I hope that this solution puts their minds at rest and closes this sorry chapter for them," Green said in a statement.
Green owned BHS for 15 years before he sold the loss-making 180-store chain to Dominic Chappell, a serial bankrupt with no retail experience, for one pound in 2015.
BHS went into administration in April 2016 and the last of its stores closed in August. Some 11,000 jobs were lost.
"Once again, I would like to apologise to the BHS pensioners for this last year of uncertainty, which was clearly never the intention when the business was sold," Green said.
Green will provide funding for a new independent pension scheme to give pensioners the option of the same starting pension they were originally promised by BHS, and higher benefits than they would get from the Pension Protection Fund (PPF).
Members of the current BHS schemes will have three potential options - transfer to the new scheme, opt for a lump sum payment if eligible or remain in their current scheme and receive benefits from the PPF.
The lump sum payment option will be available to members with small pots of up to £18,000 in total value.
"The agreement we have reached with Philip Green represents a strong outcome for the members of the BHS pension schemes,"said Lesley Titcomb, chief executive of the pensions regulator. "It takes account of the interests of both pensioners and the PPF, and brings a welcome level of certainty to present and future pensioners."
The settlement means the regulator's anti-avoidance action against Green and his companies will cease.
However, enforcement action against Chappell and his vehicle Retail Acquisitions will continue.