The Commons Work and Pensions Committee have published a letter from Robin Ellison, chairman of trustees of Carillion's pension scheme, which reveals the firm left a funding shortfall of around £990 million when it entered into liquidation earlier this month.
In addition, the pension regulator allowed Carillion to defer its pension payments for 2017 until 2019. As a result, Carillion's pension schemes will be transferred to the Pension Protection Fund.
However, Unite said this will result in existing pensioners having lower increases in future, while other members of its schemes will see the value of their pension fall by about 15%.
-- Advertisement --
Unite assistant general secretary, Gail Cartmail, hit out at the company for continuing to pay shareholders dividends and to pay bonuses to its senior staff while the pension black hole was allowed to "spiral out of control".
"Members of Carillion's pension schemes will pay for the greed of the directors and the shareholders for the rest of their lives, with vastly reduced retirement incomes," she said.
Continuing, Ms Cartmail said "every legal avenue needs to be explored" to find out if any money can be reclaimed from directors and shareholders, as well as to prosecute those responsible.
"It is outrageous that those responsible, who were lining their pockets while Carillion collapsed, could escape scot-free," she said.
"The Carillion crisis demonstrates once again that existing pension laws are far too weak. The actions of the pension regulator need to be urgently reviewed and if necessary its powers strengthened. Yet again the government has been caught sleeping on the job and its processes have been found not fit for purpose.
"New laws must be introduced which mean that bosses who benefit at the expense of pension members are suitably punished."
(LM/MH)
