The Work and Pensions Committee is to investigate the Pension Protection Fund (PPF) and the potential impact of the BHS pension liabilities upon this.
British Home Stores (BHS) filed for administration on 25 April.
The retailer entered a company voluntary arrangement (CVA) in March 2016, and has since been under assessment for entry into the PPF. The PPF pays compensation to defined benefit (DB) pension scheme members if an employer becomes insolvent and the pension scheme does not have sufficient assets to pay pensions at the minimum level of PPF compensation.
The Work and Pensions Committee will examine how receipt of pension liabilities from BHS, which has a £571m pension scheme deficit, will impact the PPF and its users.
The Pensions Regulator (TPR) has also confirmed that it is investigating the BHS pension scheme and whether it should apply its anti-avoidance powers in this case.
A statement on the BHS pension scheme website seeks to reassure members of both the BHS Pension Scheme and BHS Senior Management Scheme that insolvency will not affect the status of the schemes and that members will continue to receive PPF compensation.
Frank Field, chair of the Work and Pensions Committee, said: “We need as a committee to look at the Pension Protection Fund and how the receipt of pension liabilities of BHS will impact on the increases in the levy that will now be placed on all other eligible employers to finance the scheme. We will then need to judge whether the law is strong enough to protect future pensioners’ contracts in occupational schemes.”
A spokesperson for The Pensions Regulator added: “We can confirm that we are undertaking an investigation into the BHS pension scheme to determine whether it would be appropriate to use our anti-avoidance powers.
“Such cases are complex. There is a clear process that must be followed and this can sometimes take a considerable amount of time. We are unable to provide a running commentary on case investigations, or confirm the targets of our investigation.
“When it becomes appropriate to do so, we will consider issuing a report of our activities in this case.”
