Government to get tough on company pension failures
Prime Minister Theresa May has indicated the government plans to introduce sanctions for top executives who fail to protect employee pension schemes, as part of her renewed commitment to creating fairer pay practices
22 Jan 2018
Writing in a national newspaper in the wake of the collapse of Carillion, May said senior bosses had too often reaped ‘big bonuses for recklessly putting short-term profit ahead of long-term success’.
‘In the spring, we will set out new tough new rules for executives who try to line their own pockets by putting their workers' pensions at risk - an unacceptable abuse that we will end,’ May said.
Other measures being considered for inclusion in a white paper in March would give regulators new powers to block or place conditions on takeovers that are deemed to put pension schemes at risk. The regulator will also be given the power to request information about how companies run schemes.
The work and pensions select committee has announced it is to take evidence on Carillion’s collapse amid concerns over the possibility some 28,000 pensioners may be affected.
Frank Field, chair of the work and pensions committee, said: ‘We have some specific concerns on the pensions side. It beggars belief that a company can be allowed to run with such apparent recklessness—and be so lucrative for the directors and shareholders—when it has a giant pension deficit and a mountain of debt.
‘I will be proposing we take evidence from the company directors, the trustees, the pensions regulator and the auditors who somehow concluded Carillion was a going concern.’
Report by Pat Sweet