Following the recent collapse of construction firm Carillion, Teresa May has vowed to stop Private Pension Abuse. The reaction from the Prime Minister comes after news that Carillion, could leave a £580 million deficit in its pension scheme. 28,000 members of Carillion’s 13 Pension schemes are facing cuts to their retirement funds.
The company employed 43,000 staff worldwide, with 20,000 of those in the UK. It was responsible for large contracts including supplying maintenance services for Network Rail and half of UK Prisons.
The recent government initiative seeks to stamp out the problem of executives trying to line their own pockets at the cost of worker’s pensions. Writing in the Observer, Teresa May said “tough new rules” will be introduced to tackle the behaviour of “executives who try to line their own pockets by putting their workers’ pensions at risk – an unacceptable abuse that we will end.”
Other actions being considered for the White Paper in March, would give regulators the power to block or place conditions on any takeovers that might put pension schemes at risk. They would also be able to request information on how companies run their Pension schemes.
The Prime Minister went on to write “The state also has a role to play when things go wrong and companies fail, as Carillion did last week. Not by bailing out the directors with a blank cheque – it will be the shareholders of Carillion, not taxpayers, who pay the price for the company’s collapse – but by stepping in and supporting those affected.”
Talks to save the company are in progress, but it is unknown whether parts of the company can be bought or taken over. The official receiver has been appointed and is seeking to maintain operational continuity.
Senior Pension adviser at Fix My Pension, Andrew Colyer-Worsell said “Many people from Carillion will find themselves in an uncertain situation regarding their pension. It’s important to act fast and seek Independent Pension advice.”