Pensions Regulator  

Regulator admits it should have acted more quickly

Regulator admits it should have acted more quickly

The Pensions Regulator (TPR) chief has admitted the watchdog should have acted quicker in the negotiations with collapsed Carillion back in 2013, when the pension scheme trustees asked for regulatory intervention.

Speaking at a hearing today (22 February) in Parliament at the work and pensions and the business, energy and industrial strategy (BEIS) committees' inquiry into the contractor insolvency, Lesley Titcomb explained what she would have done if she could turn the clock back on Carillion.

She said: "We would have reached a decision to bring in our powers to bear quicker. We would have not continued so long in that negotiation situation, and we would have tried to bring that to a conclusion quicker.

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"I think we need to be clearer, and quicker and tougher. We have changed already in that regard, we continue to change, and we will change further."

However, Ms Titcomb wasn't at the regulator at the time, since she took over the job in 2015.

Bill Galvin, who is now group chief executive of the Universities Superannuation Scheme (USS), was the regulator's head back in 2013.

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, 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 the trustees of six of Carillion DB pension schemes asked for intervention from the regulator in 2013 due to an impasse in the scheme contributions talks, the watchdog was involved in negotiations with the company and the trustees, and threatened to use its powers, but it never did, MPs were told.

The Pensions Regulator threatened to use section 231, which gives them the right to impose a contribution schedule on an employer for its pension scheme, if it is not happy with the schedule agreed between the employer and the trustee.

Ms Titcomb said: "Section 231 is a difficult power to use. We are seeking improvements to it as part of the [Department of Work & Pensions] DWP work on its defined benefit white paper at the moment."

This paper, which is expected in the spring, will bring new powers for the watchdog to be more proactive in its investigations, the secretary of state for work and pensions Esther McVey revealed last month.

Ms Titcomb added that the regulator has issued warning notices under section 231 in three situations, but has threatened to used the powers more times than that.