Sir Philip Green’s Arcadia is planning to pause payments to its pensions scheme in a bid to save cash during the coronavirus crisis.
Green’s retail empire, which includes Topshop and Dorothy Perkins, will defer its deficit recovery contributions, after all non-essential retailers were forced to close as part of a government lockdown to slow the spread of coronavirus, Sky News reported.
Arcadia has secured the backing of its pension trustees to halt the contributions, which were agreed with the UK’s pension watchdog last year. The group is supposed to pay £25m a year into the scheme over the next three years.
However Arcadia’s payments have been paused for at least three months as all stores have closed for an indefinite period.
Lady Green, Sir Philip’s wife, will continue to make a £25m contribution to the scheme, as was agreed under the retailer’s company voluntary arrangement plan last year.
Retailers have suspended rent payments and secured business rates holidays amid the coronavirus pandemic.
All non-essential stores, such as clothing and electronics retailers, were ordered to close on Monday evening as the government imposed lockdown measures on the UK.
On Friday, The Pensions Regulator (TPR) said defined benefit pension trustees should be open to requests to pause or reduce payments during the pandemic.
David Fairs, executive director of policy at TPR, said: “The significant measures and clear guidance we are announcing reflect the unprecedented and challenging situation trustees and employers find themselves in. The current scheme funding regime is flexible enough to cope with the impact of a severe economic downturn.
However, we are actively considering what additional support and guidance we need to provide now so that those who manage and contribute to people’s savings can take the right steps to ensure adequate protection, recognising the challenging situation some scheme sponsors are in.
“We will continue take a reasonable, pragmatic and proportionate approach in the weeks and months ahead and we call on trustees to follow the guidance closely to make well balanced decisions.”