Carillion bosses could be landed with pensions bill
The Pensions Regulator has confirmed it is considering issuing a ‘contribution notice’.
Former Carillion bosses could be ordered by regulators to stump up cash for the collapsed construction giant’s pension scheme.
The Pensions Regulator (TPR) has confirmed it is considering issuing a “contribution notice” – a legally enforceable demand for a financial contribution to the pension deficit – against former Carillion directors.
Currently, the Pension Protection Fund (PPF) will be forced to pick up an approximate £800 million bill left in the wake of Carillon’s collapse.
But the TPR is investigating whether the company or its directors attempted to avoid their obligations to Carillion’s pension schemes.
The Carillion directors continued to line their pockets as the pension entitlements of their workforce evaporated, with the PPF due to shoulder the staggering pension deficit they left behind Frank Field, Pensions Committee chairman
Labour MP Frank Field, chairman of Parliament’s Pensions Committee, has calculated that former directors Richard Adam, Richard Howson, Philip Green, Keith Cochrane, Alison Horner and Andrew Dougal pocketed nearly £17 million over a decade at Carillion.
Mr Field said: “The Carillion directors continued to line their pockets as the pension entitlements of their workforce evaporated, with the PPF due to shoulder the staggering pension deficit they left behind.
“It appears though that TPR could set its sights on more than those ill-gotten gains, and go after the directors it finds responsible for everything they’ve got.
“We urge TPR to take this opportunity to demonstrate the new direction and vigour it keeps professing. Clear, exemplary action, not words, is necessary now to restore any confidence in its ability to do its job and protect the pensions of ordinary people.”
Any cash recovered from the bosses would be in addition to what the pension schemes or Pension Protection Fund obtain from assets realised from the company’s liquidation, although Mr Field described this as likely to be a “paltry amount”.
A spokesperson for TPR said: “In relation to the pension schemes, TPR has launched an investigation to determine if there is information that suggests we should use our anti-avoidance powers.
“We are one of several agencies who have opened investigations. We want to understand fully what happened, whether or not our anti avoidance powers could be exercised and what lessons can be learned.”
The National Audit Office has suggested that as little as £44 million will be available to distribute to creditors, with the PPF receiving a share of that amount.
A separate study suggested the PPF could get as little as £12.6 million.
Carillion’s liquidation in January left a £900 million debt pile and hundreds of millions of pounds in unfinished public contracts.