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Retail Acquisitions may not have been fully aware of the BHS pension position when it first explored buying the retailer

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BHS' pensions fund trustees today told MPs that Retail Acquisitions may not have been fully aware of the pension scheme position when it began the process of buying the business. 

Speaking in front of the Work and Pensions committee and the Business, Innovation and Skills committee, Chris Martin, chair of the BHS Pension Fund Trustees, pointed out that the trustees had no power to "veto" the sale of BHS, and said that, from his experience, Retail Acquisitions were "confident" but "clearly [had] some uncertainty around the pension issues".

He also pointed out that, although he thought Retail Acquisitions had done some due diligence work when he met with them three weeks prior to the sale, it did not seem that it had started looking into the pensions position. 

Martin was appointed in 2014 and said he was presented with a proposed recovery plan for the scheme – Project Thor – not long after he joined.

Martin said that, when the Project Thor plan was presented to him it was "made it very clear that the BHS entity….could not support the schemes" with the support of other Arcadia companies, which somewhat limited that amount of cash that was available. 

He did not say that the communications between the Pensions Regulator and the trustees were particularly bad, describing a two-month period of discussion as "intense", but added it was "very, very disappointing" to hear that the plan had been paused ahead of the Christmas trading period.

The committee has already taken evidence from the Pensions Regulator and the Pension Protection Fund (PPF). 

Commenting ahead of the committee hearing, Frank Field, chair of the Work and Pensions committee, said: 

Project Thor looks like a great missed opportunity for BHS and its pensioners. We have only begun exploring the circumstances of its failure but the evidence paints a worrying picture of the last 18 months of Sir Philip Green’s tenure at BHS. It seems that on offer then was a bigger pension than they now might get from the PPF.

The build-up to the sale to Dominic Chappell is murkier still. We will be asking key players to further enlighten us.

BHS collapsed into administration last month, with a pension scheme deficit worth £571m. The administration places around 11,000 jobs at risk.