LONDON (Reuters) – The pensions of 9,000 employees of collapsed British department store chain BHS were secured on Sunday after a specialist insurer announced an insurance buyout of the firm’s ‘BHS2’ scheme covering 800 million pounds ($1 billion) of liabilities.
FILE PHOTO: A woman walks past the Wood Green branch of department store chain BHS, in London, August 28, 2016. REUTERS/Peter Nicholls/File Photo
Pension Insurance Corporation said the buyout left members of the scheme, which was set up in 2017 following BHS’s collapse and a cash injection by former owner Philip Green, fully insured and certain to receive benefits under the scheme.
A pension insurance buyout involves a transfer of the promise to pay pension fund members, shifting that responsibility from the fund to the insurer, and giving policyholders a guaranteed income stream.
BHS fell into administration in 2016 with a pension deficit of 571 million pounds ($729 million), with 11,000 jobs lost as result. An outcry over the collapse prompted the government to try to clamp down on bosses who do not do enough to protect workers’ pensions.
In February last year Green, who was blamed by British lawmakers for the demise of the BHS, paid 363 million pounds to plug a hole in the pension scheme. Green had sold the chain in 2015 for one pound.
Reporting by William James; Editing by Mark Potter