A former Carillion director thought funding the company's defined benefit (DB) pension schemes was a "waste of money", according to newly released documents.
The comments were found in minutes of a 2013 meeting between the pension schemes' trustees and The Pensions Regulator (TPR).
The documents, released yesterday (22 February) by the Work and Pensions and the Business, Energy and Industrial Strategy committees, showed Robin Ellison, chairman of trustees of six Carillion schemes, accused former finance director Richard Adams of focusing on the preservation of cash over pensions.
Mr Ellison’s understanding was Mr Adam considered funding pension schemes to be a "waste of money", particularly in respect of deferred members who did not actively contribute towards the business.
The document also showed the schemes’ trustees believed the pension funds were "falling further behind the company’s other stakeholders as time goes on".
Between 2008 and 2013 Carillion had "shrunk by 20 per cent but cash generation has significantly increased", the trustees said.
"However, a large amount (and nearly all) of this cash was spent on increasing dividends and the Eaga acquisition", they added.
Eaga was a British supplier of energy efficiency products bought by Carillion in 2011 for £306m.
The document was published after yesterday’s hearing, where MPs heard evidence from TPR and auditors from KPMG and Deloitte.
Lesley Titcomb, TPR’s chief executive, 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.
Carillion's DB pension schemes, 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.
The company 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 went into liquidation in January.
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.
Yesterday, trade union Unite called on the governmental committees to investigate the pension contributions of thousands of public sector contractors which allegedly went missing shortly before Carillion collapsed.
The union 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.
A spokesman for Carillion’s Official Receiver said it is currently reviewing the actions of the company, including treatment of pension contributions, as part of the investigation which has been fast-tracked.
He said: "Substantial payments to pension funds have been made since the liquidation by the Official Receiver and he is ensuring any further payments properly due are met.
"The Official Receiver is continuing to consult regularly with unions who have members in Carillion group companies as the liquidation continues."
maria.espadinha@ft.com
