Unite The Union, has warned that if the Arcadia Group is forced into administration not only are up to 15,000 jobs at risk but current and former workers also face large reductions in future pension payments.
The union says that the failure of the government to beef up the role of the pensions regulator in the wake of the last great corporate crash, that of Carillion in 2017, means that blameless Arcadia workers could see their retirement savings `stolen’ from them as the group spirals into administration.
Arcadia’s pension funds are understood to have a deficit stretching into hundreds of millions of pounds with a decision taken in March this year to withhold a monthly £2 million payment to the scheme.
If the company is forced into administration this is likely to result in the pension schemes falling into the taxpayer-supported Pension Protection Fund. Retired workers will see future annual increases diminished, while existing workers at Arcadia and former employees yet to retire will only have 90 per cent of their pension protected.
Unite national officer Matt Draper said: “Thousands of Arcadia’s existing workforce and its previous employees face the prospect of the value of their pension being greatly diminished in yet another example of bandit capitalism on the UK’s High Street.
“These workers are totally blameless yet will be paying the price of Sir Philip Green’s mismanagement in their retirement while he enjoys a very comfortable old age on his yacht in the South of France.
“This is yet another example of innocent working people suffering at the hands of boardroom greed.
“It is made worse because this should not have had to happen. If the government had acted following Carillion’s collapse this dreadful situation could have been averted.
“It is nearly three years since those corporate bandits collapsed but the government has failed to act to ensure that workers, who are entirely blameless for corporate failures, are not unfairly penalised.
“How many more workers must have their retirement savings stolen from them before the government does the right thing?
“The powers of the pension regulator must be greatly enhanced to ensure that it can and does step in to prevent employers from allowing pension deficits to widen.
“More importantly strict new rules must be introduced to ensure that companies cannot prioritise funding shareholder dividends, bonuses and executive pay over making pension deficit recovery payments.”