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MPs to grill Carillion pension head as auditors probe

Chairman of Carillion pension scheme trustees will face questioning as Financial Reporting Council launches investigation.

MPs to grill Carillion pension head as auditors probe
 

The chairman of the Carillion pension scheme trustees, Robin Ellison, will be grilled by MPs on the work and pensions committee today in the wake of the company’s collapse, which will leave the pension scheme in the lifeboat Pension Protection Fund.

In a letter earlier this month committee chair, Labour MP Frank Field, challenged Ellison over the measures he took to put the pension scheme in the best possible position.

Also this morning the Financial Reporting Council has decided to open an investigation in relation to KPMG's audit of the financial statements of Carillion. The investigation will cover 2014, 2015 and 2016, and additional audit work carried out during 2017.

The committee has accused the company of wriggling out of its pension obligations and has highlighted the trustees’ agreement to defer pension contributions in 2017. Field’s committee has also remarked upon The Pension Regulator’s seeming lack of intervention after becoming aware of trustees’ concerns.

Field asked:

  • What assurances were sought about the sponsor's business model during Ellison’s tenure as trustee chairman?
  • How did the trustees respond to a profit warning issued in July last year
  • What has caused the upsurge in the pension deficit?
  • Explain the investment strategy and approach to de-risking adopted by the trustees.
  • What interactions has Ellison had with The Pensions Regulator?
  •  Was Ellison aware that Philip Green, chairman of Carillion, was found guilty by the Pension Ombudsman in 1994 of breach of trust and maladministration in respect of the use of pension scheme monies at Coloroll, where he was managing director and a pension trustee?

Tom McPhail, Hargreaves Lansdown head of policy said: ‘It is easy to criticise the actions of the trustees and the regulator with the benefit of hindsight. In spite of last year’s profits warning, it was far from certain to outside observers the company was about to go bust.

‘The trustees took a decision to try and save the company, rather than refusing to cooperate in its attempts to finance its cashflow. In general, by far the best outcome is for the sponsoring employer to continue to trade and pay pension contributions in the future. The problems really start when as now, the company goes bust and the music stops.’

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