The Pensions Regulator (TPR) has denied any negligence over Carillion's pension funds, arguing the information it had over the years did not cause sufficient concern to justify the use of its powers.
The watchdog's comments come after Frank Field, chairman of the Work & Pensions select committee, said The Pensions Regulator had "questions to answer", since it has been involved in Carillion schemes' valuation negotiations since 2008.
The defined benefit (DB) pension schemes of Carillion, one of the UK government's biggest contractors, are all either in the retirement fund of last resort, the Pension Protection Fund (PPF), or will soon enter it.
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, according to the company's results.
After unsuccessful talks with its lenders and the UK government, Carillion made an application on 15 January to the High Court for compulsory liquidation.
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 just before it went into administration.
Robin Ellison, chairman of trustees for six of Carillion's pension schemes, wrote in a letter to Mr Field that the trustees and Carillion weren't able to reach an agreement for both the 2008 and 2011 valuations.
This was essentially due to the trustee seeking to take a more prudent approach to funding than the company considered it could afford.
The regulator was involved in these discussions, and decided not to exercise its powers, Mr Ellison added.
A spokesperson at The Pensions Regulator said: "We have been in contact with Carillion and the pension scheme trustees for a number of years about the funding of the pension schemes as part of our role to protect member benefits.
"Before the first profit warning in July 2017, we were already working proactively with the trustee of the six defined benefit schemes, which shared a single trustee in relation to their latest valuation.
"Our involvement continues during what is a very concerning time for present and former Carillion staff."
The spokesperson added that the current regulatory framework attempts to balance the needs of a scheme and its members with the needs of an employer to invest in their ongoing business, and that this should be reflected in the length and structure of the recovery plan.
He said: "The Pensions Regulator does not approve recovery plans - it is for the trustee and employer to agree them.
"The content of Carillion's recovery plans, and its payment of dividends, did not highlight sufficient concern to justify the use of our powers based on the group's trading strength as presented at the time in their audited accounts.
"However, it is clear from the company's announcements since July that their underlying profitability was significantly weaker than market understanding or the position set out in prior year accounts.