Frank Field has accused The Pensions Regulator (TPR) of being “tentative and apologetic” in relation to Carillion defined benefit (DB) pension schemes.
Work and pensions committee chairman Field (pictured) appeared unhappy with the response TPR gave to the Work and Pensions Select Committee after he had contacted TPR chief executive Lesley Titcomb with questions on its approach to Carillon’s DB pension schemes.
The response from Titcomb, dated 26 January, revealed TPR had been in discussions with the trustees of several of the stricken construction firm’s pension schemes for a number of years as part of its role to review the firm’s long-term funding.
According to Titcomb, following Carillion’s first profit warning in July 2017, TPR had had “frequent and close contact” with the schemes “to ensure that members and the Pension Protection Fund (PPF) are protected to the greatest extent possible”. TPR had also had meetings with senior executives from Carillion, their advisers, and “major financial creditors”, she added.
Furthermore, Titcomb said, the regulator had launched an investigation into whether it should use its anti-avoidance powers.
Field seemed unimpressed with Titcomb’s response, however, saying TPR’s work did not “cut the mustard”. “TPR’s investigation is much too late for the pensioners, who will inevitably now receive reduced benefits through the PPF, and too late for the PPF levy-payers, who will pick up the tab,” he said.
Field said that although the regulator had been aware of the problems at Carillion since 2008, there was “little evidence of any hard action”.
He continued: “This tentative and apologetic approach does not cut the mustard. We’ve made proposals – such as nuclear deterrent fines for avoidance – to strengthen the hand of pensioners. They need legislation – not words – from government to sort this out.”
TPR is the second regulatory body Field has criticised in two months. In December, he branded the Financial Conduct Authority’s handling of the British steelworkers’ pensions scandal “grossly inadequate”.
Carillion collapse
On 15 January, the giant construction firm entered liquidation, meaning some 28,500 DB scheme members now face entering the PPF, costing the fund around £900m.
Earlier this month it was revealed some executives at the company had been paid more than £1m in salaries and bonuses while the firm’s debts increased.
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