The Topshop to Miss Selfridge retail empire owned by Sir Philip Green has a pension deficit close to £1 billion, based on the most stringent calculations, it has emerged.
The £993 million sum represents a ‘worst case’ scenario of the amount required to pass the scheme to a third party pension insurer in the event of Arcadia closing.
Even a much less conservative estimate indicates a deficit of £565 million – far higher than previous valuations which had put the figure at no more than £300 million.
The calculations were outlined in two letters, one posted to members of the Arcadia staff fund and a second sent to those belonging to a separate Senior Executive fund.
The correspondence also details how Green plans to plug the black hole using a ten-year funding plan.
Under the billionaire’s proposals the £565 million figure would be settled and the scheme would be brought back to balance by the end of 2026.
Frank Field MP, Green’s chief tormentor and chairman of the Work and Pensions Committee, said using either measure indicated a ‘huge’ deficit.
‘Given the track record at BHS one couldn’t help but be anxious about how the plan is going to be fully implemented,’ he said.
‘We now need to know whether all the interested parties are happy with the new funding plan. The retail market is changing quickly and these are huge sums.’
The £1 billion buy-out calculation provides a ‘benchmark’ for the state of the funds, said Field. He said it compared directly with the £571 million figure that was required for a full funding of the two separate BHS schemes.
Green has been plagued with criticism over his handling of the BHS collapse in March last year, which left 20,000 pensioners adrift.