The Pensions Regulator (TPR) has reached a deal with Sir Philip Green over the British Homes Stores (BHS) pension schemes.
The arrangement will see Green provide £363m funding for a new independent pension plan to give pensioners the option of the same starting pension as they were originally promised by BHS, and higher benefits than they would get from the Pension Protection Fund (PPF).
Under the terms of the deal, members will now be given three options: to transfer to a new pension scheme that will give pensioners the same starting pension as was offered by the original BHS schemes; opt to take a lump sum if they have a small pension pot of up to £18,000 in total value; or remain with their current scheme, currently in the PPF assessment period, and receive at least PPF benefit levels
The full details of the agreement can be seen here in a 'quick quide' to the BHS pensions settlement
As a result of this settlement, the regulator's anti-avoidance enforcement action against Sir Philip Green, Taveta Investments Limited, and Taveta Investments (No. 2) Limited, will cease. Enforcement action continues in respect of Dominic Chappell and Retail Acquisitions Limited.
TPR chief executive Lesley Titcomb said: "The agreement we have reached with Sir Philip Green represents a strong outcome for the members of the BHS pension schemes. It takes account of the interests of both pensioners and the PPF, and brings a welcome level of certainty to present and future pensioners.
"Throughout our discussions with Sir Philip and his team, we have always been clear that we were determined to achieve the right outcome for members of the schemes both in terms of the amount and the structure of the settlement."
In a statement Green said: "I have today made a voluntary contribution of up to £363m to enable the trustees of the BHS Pension schemes to achieve a significantly better outcome than the schemes entering the PPF, which was the goal from the outset.
"Once again I would like to apologise to the BHS pensioners for this last year of uncertainty, which was clearly never the intention when the business was sold in March 2015.
"I am also happy to confirm that any of the pensioners that have faced cuts over the last year will now be brought back to their original BHS starting level pension and will all be made whole."
"I hope that this solution puts their minds at rest and closes this sorry chapter for them."
The settlement comes after a period of intense negotiation between the watchdog and Sir Philip.
PPF chief executive Alan Rubenstein added: "This settlement for the BHS pension schemes, agreed between Sir Philip, TPR and the trustees, with the involvement of the PPF, relieves the PPF's levy payers of the cost of meeting the initially reported shortfall.
"TPR will be monitoring the new scheme and members will be protected by the PPF."
It has sent warning notices or statements of its case to Green, Taveta Investments Limited, Taveta Investments (No. 2) Limited, Dominic Chappell, Retail Acquisitions Limited (RAL).
His appearance was part of a long and widely covered joint inquiry into the collapse of BHS by the WPC and Business, Innovation and Skills (BIS) committee.