Defined BenefitJan 18 2018

Carillion on pensions lifeboat watch list since autumn

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Carillion on pensions lifeboat watch list since autumn

Retirement fund of last resort, the Pension Protection Fund (PPF), was aware of potential issues arising from Carillion last autumn when it put on the scheme on its problem watch list.

A spokesperson at the PPF confirmed that pension schemes are placed on the watch list if it is thought they might come to the PPF, typically following the insolvency of the sponsoring employer.

The defined benefit (DB) pension schemes of Carillion, one of the UK government's biggest contractors, will enter the PPF.

Carillion has 13 final salary schemes in the UK with more than 28,500 members, and a deficit of £587m at the end of July.

After unsuccessful talks with its lenders and the UK government, Carillion made an application on Monday (15 January) to the High Court for compulsory liquidation.

The accountancy firm PWC has been appointed as administrator.

Seven pension funds have already entered a period of assessment at the pensions lifeboat, which have around 5,900 members, a spokesperson at the PPF said.

Guidance body The Pensions Advisory Service (Tpas) has in the meantime set up a dedicated helpline for members of the Carillion pension schemes.

Before the liquidation announcement, the contractor had discussions with the PPF about ways to restructure its pension debt.

Carillion, which employs about 43,000 people, has been struggling for several months, issuing a profit warning last year that sank its share price – which has fallen from more than £2 a year ago to about 14.2p on Monday.

On the same day, Liberal Democrat MP Stephen Lloyd submitted a motion in Parliament calling for an inquiry into collapsed Carillion.

FTAdviser reported yesterday (17 January) that there are already signs that scammers may be circling the company’s DB scheme members.

maria.espadinha@ft.com