Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

MPs: Carillion tried to 'wriggle out' of pension duties

carillion generic cropped

MPs have accused Carillion of trying to “wriggle out” of its pension contributions so that it could borrow money to ease cash flow concerns. 

The Commons work and pensions committee today (Monday) said that Carillion’s 2017 pension contributions had been deferred until 2019 to allow the failed firm to borrow extra cash, revealing its pension deficit could be more than £400M  higher than the £580M previously reported.

Meanwhile the Pensions Regulator (TPR) has launched its own investigaton into whether it should use its anti-avoidance powers against Carillion bosses. The revelations came as the Financial Reporting Council (FRC) launched a separate investigation into KPMG’s financial auditing of Carillion.

Details of the pension deficit came in a letter to the committee from Carillion DB Pension Scheme trustees chair Robin Ellison, who will appear in before the committee for questioning tomorrow.

Cash flow problems in 2011 and 2013 were cited as a reason for not making higher pension contributions in both years, but shareholders were still paid more than £70M in dividends in each of those two years.

The letter also claimed that TPR had been concerned about Carillion’s pension scheme since 2008.

Work and Pensions committee chair Frank Field said it was clear Carillion had been trying to “wriggle out” of its obligations to pensioners for 10 years.

He added: “Once again, TPR has questions to answer. They have been sniffing around Carillion - at the trustees’ behest - since at least 2008, though it is not apparent to what effect. When 10 years later the company collapses with £29M in the bank and £2bn in pension liabilities it doesn’t look good for them.”

The Commons work and pensions and business, energy and industrial strategy committees are conducting a joint inquiry into Carillion’s collapse.

Tomorrow (Tuesday) Insolvency Service chief executive Sarah Albon, Financial Reporting Council chief executive Stephen Haddrill, Independent Trustee Services managing director Chris Martin and Carillion Defined Benefit Pension Scheme chair of trustees Robin Ellison will face questions from the committees.

Carillion’s ex-chief executive Richard Howson, chairman Phillip Green, finance directors Richard Adam, Zafar Khan and Emma Mercer, and interim chief executive Keith Cochrane will be questioned on 6 February.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Please note comments made online may also be published in the print edition of New Civil Engineer. Links may be included in your comments but HTML is not permitted.