Carillion guilty of ‘wriggling out’ on pensioner payouts, committee told

Carillion has been accused of trying to “wriggle out” of its obligations to pensioners while paying out tens of millions in dividends for shareholders and “handsome pay packets” for bosses. The Commons Work and Pensions Committee criticised the collapsed outsourcing giant after publishing a letter from Robin Ellison, chairman of trustees of Carillion’s pension scheme, which gives an account of the firm’s pen- sion scheme. Carillion’s liquidation left in its wake a £900 million debt pile, a £590m pension deficit reported by the firm and hundreds of millions of pounds in unfinished public contracts.

Mr Ellison’s letter suggests the pension deficit could be even higher at £990m.

Carillion has been “falling short” of what trustees expected it to contribute to pension schemes since 2008, the MPS said after analysing the letter.

The company cited cash flow problems as a reason for not making higher pensions con- tributions in 2011 and 2013, but paid more than £70m in dividends in both those years.

The trustees were also “kept in the dark” about the state of Carillion, only having access to information “largely” in the public domain until May 2017.

And finally, the trustees “negotiated away” pension deficit contributions in the autumn in an effort to keep Carillion afloat by enabling more borrowing. The comments will ratchet up pressure on Mr Ellison ahead of his appearance before the committee tomorrow.