Defined Benefit  

'Missing' Carillion pension contributions cause concern

'Missing' Carillion pension contributions cause concern

Unite has called on MPs to investigate the pension contributions of thousands of public sector contractors which allegedly went missing shortly before Carillion collapsed.

The trade union, with more than 1.4 million members, has claimed Carillion workers paid their last pension contributions in December but neither that money nor the employer's contributions have not been received by the statutory pension schemes.

Unite has said the allegedly missing contributions could be worth more than £1m

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Carillion, which employs about 43,000 people, had 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.

After unsuccessful talks with its lenders and the UK government, Carillion went into liquidation in January.

Unite, which has 100,000 members potentially being affected by the contributions issue, said its questions had been meet with a "brick wall" by the Insolvency Service and the special managers appointed to deal with Carillion’s liquidation.

The union is now calling on Frank Field and Rachel Reeves, the respective chairs of the Work and Pensions and the Business, Energy and Industrial Strategy select committees, to launch a probe into this.

Colenzo Jarrett-Thorpe, Unite’s national officer for health, said this is a matter of "serious concern".

He said: "Workers make contributions towards their retirement and have every right to expect that those contributions go to the rightful pension schemes.

"Money has been taken from workers’ wages for their retirement and that money appears to have disappeared into the ether.

"The financial stewardship of Carillion in its last months was a prime example of out of control, feral capitalism."

PwC, which has been appointed as special manager in the Carillion liquidation, has said it is currently investigating if all pension contributions have been made into the appropriate pension schemes.

This is not the first time that Unite as called for government intervention in the Carillion collapse.

In January, the trade union asked MPs to explore whether money can be clawed back from Carillion's directors and shareholders to plug its pension.

When Carillion won public sector contracts in the NHS, the Prison Service, the Ministry of Defence and local authorities, the company applied for admitted body status and continued to pay contributions into the public-sector pension schemes of these organisations.

Carillion also had 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.

The defined benefit pension schemes of Carillion are all either in the retirement fund of last resort, the Pension Protection Fund (PPF), or will soon enter it.

maria.espadinha@ft.com