The BHS pension thing isn’t really about Green and the dividends at all:
Mark Carney has just made Sir Philip Green’s life even more difficult. The retail tycoon’s bid to bail out the BHS pension scheme, and hold on to his knighthood, could have soared to more than £700m after the Bank of England governor presided over a cut in interest rates last week.
Adding to the pressure, the Bank also pumped more cash into the UK economy in a move that hit gilt yields – the return on government debt.
The cut in borrowing costs to 0.25%, combined with a new round of quantitative easing, sent gilt yields crashing to a new low. This could add another 7% to pension scheme deficits, according to consultancy Hymans Robertson, which would add nearly £50m to the BHS bill.
A plunge in the value of gilt yields after the EU referendum contributed to a near-19% rise in the average value of pension deficits controlled by the PPF between February and June. That suggests a rise of about £100m for the BHS scheme’s maximum deficit, taking it to £670m. Last week’s action by the Bank of England has sent it soaring again.
The dividends came out up to 2004 or so, In 2006 the scheme was in minor (£30 million or so) deficit. It’s the change in investment returns since then which have killed that pension scheme.
And no, there’s not that much in law to state that Green is liable for it either.