The Pensions Regulator (TPR) has today published a Determination Notice (PDF, 962KB, 51 pages) outlining its decision to issue Contribution Notices for £9.5 million against Dominic Chappell in respect of the two pension schemes connected to the collapsed high street chain BHS.
The notice outlines that TPR’s Determinations Panel (the Panel) will consider a broad range of factors in deciding whether there has been material detriment to a pension scheme, including those where the detriment cannot be easily quantified.
In this case the Panel concluded that a series of acts were materially detrimental to the pension schemes. These included the acquisition of BHS, management decisions of the company, the appointment of inexperienced board members, the implementation of an inadequate business plan and the way money was extracted and distributed to Mr Chappell, advisers, company directors and family members.
In January 2018, the Panel ruled that two Contribution Notices for a total of £9,542,985 be issued against Dominic Chappell.
Mr Chappell referred the decision to the Upper Tribunal. Following a lengthy legal process, that reference was struck out by the Upper Tribunal, and so the decision of the Determinations Panel stands. Contribution Notices against Mr Chappell were subsequently issued in August 2019. The Pension Protection Fund is responsible for obtaining the money from Mr Chappell, for the benefit of the schemes.
Nicola Parish, TPR’s Executive Director of Frontline Regulation, said:
“We are pleased that the decision to issue two Contribution Notices to pay money into the BHS pension schemes stands.
“This case illustrates how TPR is willing to pursue a case through the courts to seek redress for pension savers. It illustrates the situations our anti-avoidance powers were designed to meet and which allow us to protect the retirement incomes that savers deserve.”
The issuing of the two Contribution Notices marks the end of TPR’s anti-avoidance enforcement against Mr Chappell.
- The Determinations Panel (the Panel) is a committee of TPR. It operates separately from other parts of the organisation, including TPR’s case teams. The Panel has a separately appointed membership and legal support. This enables it to make independent and impartial decisions. The Panel considers all the evidence before it and provides each party with reasonable opportunity to present their case. Members of the panel are not involved in the investigation process.
- The Warning Notice was issued against Mr Chappell in November 2016. The oral hearing before the Panel took place in December 2017. Mr Chappell referred the Panel’s decision to the Upper Tribunal in January 2018 but his reference was struck out for failure to comply with tribunal directions in December 2018. Mr Chappell applied to reinstate his reference, which TPR contested and the final hearing of that application was heard by the Upper Tribunal in June 2019. The Upper Tribunal judgment was issued in July 2019.
- View the final Upper Tribunal decision.
- The Panel issued the Contribution Notices to Mr Chappell in August 2019 and the PPF is now responsible for obtaining the money from Mr Chappell, for the benefit of the schemes.
- In February 2017 TPR agreed a £363 million cash settlement with Sir Philip Green in respect of its separate regulatory action regarding the BHS pension schemes and in June of that year published a regulatory intervention report on the matter.
- TPR is the regulator of work-based pension schemes in the UK. Their statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of TPR’s functions under Part 3 of the Pensions Act 2004 only).