Carillion: short changed workers but cushioned shareholders & directors
Carillion paid only £94m towards the pension deficit but sent £162m in dividends to shareholders over 2015 and 2016.
Media reports agree with Debbie Abrahams, shadow secretary of state for Work and Pensions that Carillion have failed in their duty to ensure that their pension provision was adequately managed and resourced.
She is on record as pointing out that they could well have done so, in a letter to the regulator, asking whether they were aware of dividends payments to shareholders far higher than the payments to employees’ pensions.
The FT, BBC, Telegraph, Guardian, Reuters and Citywire online reports cover news of the deficit but fail to mention what appears to be preferential treatment for directors
Carillion’s last accounts, to December 2016, show there was a combined deficit on half a dozen defined benefits schemes linked to employees’ salaries of £811m but a surplus on a directors’ scheme of £6m.
Private Eye reporting this asked: “How could most of the company’s pension commitments, covering tens of thousands of employees, be so woefully underfunded when those for a small number were fully financed?”
It notes that the PR firm acting for the trustees (possibly Teneo Blue Rubicon taking over from Bell Pottinger) refused to provide a breakdown of the schemes’ positions, which in the secretive pensions world remain confidential.
Several former directors – who had received large salary, pensions and bonuses -were questioned by the Work & Pensions and BEIS select committees on 6th February, including former chief executive Richard Howson, former finance director, Richard Adam and current chairman Philip Green (above) in an informative article in The Construction Index.
A final PE comment: with ordinary workers facing serious cuts to their retirement incomes, MPs led by pensions select committee chair Frank Field are unlikely to take “no comment” for an answer.
Posted on February 16, 2018, in Finance, Government and tagged directors, employees, MP Debbie Abrahams, MP Frank Field, pensions, pensions deficit, pensions regulator, Private Eye. Bookmark the permalink. Leave a comment.