The Pensions Regulator (TPR), the watchdog that oversees UK work-based pension schemes, has come under fire from MPs’ joint inquiry into Carillion’s collapse who criticised its “weak position” in its dealings with the failed contractor.
The Work and Pensions Committee published a series of correspondence this morning covering TPR’s actions and use of powers in relation to Carillion.
The publication of the documents came as work and pensions secretary Esther McVey was due to appear in front of the committee this morning, to answer questions on proposals in a recently published white paper, detailing how the government plans to increase protections for defined benefit pension schemes and prevent another situation like Carillion’s occurring.
The committee noted that most of TPR’s negotiations were conducted via PwC, the firm that advised Carillion’s directors on managing their pension liabilities from 2012 to 2017.
In the autumn of 2017, PwC became an adviser to Carillion’s pension trustees at the same time as advising the government on its dealings with Carillion.
In its current role as Special Managers, PWC is tasked with salvaging funds for the Pension Protection Fund (PPF), which is expected to pick up all but two of Carillion’s 13 pension schemes.
It has estimated the funding shortfall for the schemes at around £900m.
The inquiry claimed its correspondence with TPR showed that it had become sympathetic to former Carillion finance director Richard Adam’s proposal to defer the firm’s pension deficit contributions.
It also highlighted the length of time it would have taken TPR to impose a schedule of contributions in the absence of an agreement and its weakness when it came to imposing potential sanctions.
Meanwhile, committee chair Frank Field offered a withering assessment of PwC’s role in the affair.
He said: “PwC had every incentive to milk the Carillion cow dry. Then, when Carillion finally collapsed, PwC adroitly re-emerged as butcher, packaging up joints of the fallen beast to be flogged off.
“For this they are handsomely rewarded by the taxpayer.
“They claim to be experts in every aspect of company management. They’re certainly expert in ensuring they get their cut at every stage.”
PwC has declined to comment.
