Independent Labour MP Frank Field has questioned The Pensions Regulator about what will happen to the Interserve defined benefit pension scheme and its members after the contractor was sold last week.
The chairman of the Work and Pensions select committee questioned the watchdog about the dialogue their officials have been having with the contractor, which entered administration on Friday (March 15) and was sold immediately after.
Mr Field said: "From the reports in the press, we understand that The Pensions Regulator has been working with the trustees to ensure that pension scheme members are protected. That would certainly be very welcome indeed."
He asked Mark Boyle, TPR’s chairman, what members of Interserve’s pension scheme could expect, and whether the regulator was satisfied the individuals had received appropriate communication about the situation.
Mr Field also asked details about the assurances given by Interserve to the watchdog in relation to the funding of the scheme, and whether the sale was the best outcome for its members.
A TPR spokesperson said: "We note the developments in relation to Interserve and we remain in contact with both the trustee and sponsoring employers, and their advisers, to ensure the best possible outcome for pension scheme members at what is a challenging time."
Interserve can continue trading after Friday’s announcement, where a deleveraging transaction was also revealed – which involved the equitisation of approximately £485m of existing debt and £110m of additional liquidity.
The company stated the sale of the group minimised "any disruption to the business, providing continuity for customers and suppliers, and protecting the group's employees,” including the beneficiaries of the group's pension schemes.
Interserve has been struggling with almost £650m in debt, and it has been on the government’s watch list amid concerns it could become the next Carillion.
After unsuccessful talks with its lenders and the UK government, Carillion went into liquidation in January 2018.
The contractor had 13 final DB in the UK with more than 28,500 members, and an aggregate deficit for Pension Protection Fund purposes of about £800m.
However, the Interserve Pension Scheme, a final salary plan closed to future accrual in 2009, seems to be in a better position.
According to the company’s latest annual results, the scheme had a £93.9m surplus based on the IAS 19 accounting measure, compared with a £48m deficit at the end of 2017.
This improvement was due to the trustees of the scheme changing the indexation on future pension increases from the retail price index to the consumer price index.
RPI generally runs at about 1 percentage point higher than CPI.
maria.espadinha@ft.com
