Carillion "wriggled out" of payments into its company pension schemes as its troubles grew, while it carried on paying shareholder dividends and bosses' bonuses, say MPs.The Work and Pensions select committee is questioning the way pension investments were managed at the collapsed outsourcing giant. The schemes overall are in deficit.
But last year contributions to the pension funds were deferred until 2019, to help shore up the firm's finances. The committee has published a letter from Robin Ellison, chairman of trustees of Carillion's DB Pension Scheme, giving an account of the last few years and suggesting they have been left with a funding shortfall of around £990m. The letter shows that pension trustees were "kept in the dark" about the state of Carillion's finances until late last year, the committee argues, and that dividends and bonuses were paid out at the expense of pension fund contributions. The select committee's chair, Frank Field said: "It's clear that Carillion has been trying to wriggle out of its obligations to its pensioners for the last 10 years."
Mr Ellison will appear in person to answer questions from committee members later this week as pressure grows on those involved to explain why the pension funds' shortfall was allowed to widen sharply as the company's difficulties worsened. Contributions squeezed Carillion, which manages a huge variety of public sector and private projects around the UK, from rebuilding Battersea Power Station to cleaning prisons, collapsed under a growing mountain of debt two weeks ago.
source:www.bbc.com
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