LONDON (Reuters) – Britain’s pensions regulator twice ignored requests from trustees of collapsed outsourcing agency Carillion (CLLN.L) to drive the company to plug its pension deficit, MPs mentioned on Tuesday.
The Pensions Regulator has come underneath fireplace for taking inadequate steps to guard pension scheme members of troubled corporations, following the collapse of division retailer chain BHS in 2016.
Carillion collapsed on Jan. 15, with solely 29 million kilos of money left. It had pension liabilities of round 2.5 billion kilos, two parliamentary committees analyzing Carillion’s collapse mentioned.
The Pensions Regulator didn’t use any formal powers concerning Carillion whereas the company was solvent despite the fact that trustees urged it to take action in 2010 after which once more in 2013, the MPs mentioned in a press release.
The regulator opened a proper investigation into Carillion on Jan. 18, three days after its collapse.
“With characteristic alacrity, the Pensions Regulator started its arduous process of chasing money down from Carillion a few days after it was formally announced there was no money left,” mentioned Frank Field, chair of parliament’s Work and Pensions Committee.
The Pensions Regulator mentioned in a press release that whereas it didn’t use its formal powers earlier than Carillion’s collapse, its menace to make use of them in 2013 had a optimistic influence.
“Our intervention resulted in a significant increase in the amount of money the company was prepared to pay into the scheme,” it mentioned.
“We believed this was reasonable based upon our understanding of the company’s trading strength, as set out in its audited accounts.”
Carillion’s trustees mentioned in a letter to the regulator in 2010, revealed by MPs, that further deficit funds supplied by the company had been “not acceptable”. In 2013, in one other letter, they mentioned the scheme was “taking a disproportionate amount of risk”.
Carillion’s pension scheme is within the technique of transferring to the Pension Protection Fund, a lifeboat for pension funds of failed corporations, which is able to possible imply a loss of advantages for almost all of the 27,500 scheme members.
Reporting by Carolyn Cohn; Editing by Susan Fenton