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Pensions watchdog weighs powers to pursue Carillion directors’ assets

British Pounds in a Mouse TrapThe Pensions Regulator is considering if it can use its powers to go after the directors of Carillion to force them to contribute to the collapsed construction company’s pension scheme.

TPR is investigating issuing a contribution notice, which gives it the power to legally demand a financial contribution to the pension deficit.

Issuing the contribution notice against the former directors could result in recovering more money on top of what the pension schemes or Pension Protection Fund get from any assets realised from Carillion’s liquidation.

In a letter to TPR, the work and pensions select committee says its analysis of Carillion’s accounts suggests that over the past 10 years the company’s six main directors pocketed nearly £17m in total remuneration.

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The letter says: “While such amounts will not go far in offsetting the largest bill the PPF has ever picked up, estimated at £800m, it is surely the case that these directors have benefited disproportionately at the expense of the pension schemes they should have been funding.”

Committee chair Frank Field says: “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.”

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He says: “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 do its job and protect the pensions of ordinary people.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. I must admit the thing I find always puzzling is how the shareholders can pocket all the “profits”, even whilst the company is not funding it’s pension scheme properly.

    If it’s demonstrable that dividends were being paid out when they shouldn’t have been, should not the directors and potentially large shareholders bear some liability for this?

    Otherwise this is no different to BHS and Phillip green pillaging the company and effectively it’s pension scheme and then walking away..

  2. I’d welcome TPR taking punitive action against Directors who effectively stole from their employees. Pensions are deferred pay, so lining their own pockets at the expense of those future pension payments is in my eyes theft.

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