Carillion has been accused of ducking its responsibilities on its pension fund for close to a decade, as the shortfall skyrocketed but bonuses and shareholder dividends were still paid out.
Evidence given to the Work and Pensions Committee from Robin Ellison, chair of Carillion DB Pension Scheme trustees, suggests the shortfall could be nearly double the £600m first proposed, at close to £990m (valued in 2016), while the 'buy-out basis' valuation - assessed by estimating the cost of buying out the accrued benefits with an insurance company - was put at around £2bn.
Mr Ellison claimed the Pensions Regulator (TPR) was alerted to problems with the company's main pension plans as far back as 2008, but Carillion insisted it was 'constrained in agreeing higher contributions due to constraints in cash flow connected with its business model'.
Mr Ellison outlines several such discussions between TRP and the company, in 2008, 2011 and 2013. 'Ultimately, for all three valuations, tPR decided not to exercise its powers,' Mr Ellison writes.
Around 28,000 members of Carillion's 13 pensions schemes are facing cuts to their retirement benefits following the liquidation of the company this month.
Frank Field MP, chair of the Work and Pensions Committee, said: 'It’s clear that Carillion has been trying to wriggle out of its obligations to its pensioners for the last 10 years. The purported cash flow problems did of course not prevent them shelling out dividends and handsome pay packets for those at the top.
'This culminated in negotiating deficit contributions away entirely last autumn to enable more borrowing. Remarkably, this was endorsed by the trustees and the Pensions Regulator.
'Once again, TPR has questions to answer. They have been sniffing around Carillion - at the trustees’ behest - since at least 2008, though it is not apparent to what effect.
'When 10 years later the company collapses with £29m in the bank and £2bn in pension liabilities it doesn’t look good for them.'
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