The defined benefit pension schemes of crisis-hit Carillion will enter the Pension Protection Fund (PPF), after the government contractor entered liquidation today (15 January 2018).
Carillion, which reported a £587m pension deficit in 2017, currently looks after 13 final salary pension schemes with 28,500 members.
The construction firm held crisis talks with the government yesterday, Sunday 14 January 2018, but failed to reach an agreement with key stakeholders and this morning took the first steps to enter into liquidation.
The PPF have confirmed that it has been notified that some of Carillion Group’s companies have gone into liquidation and moved to reassure that their benefits will be protected by the lifeboat fund.
PwC has been appointed as special managers of the firm, while The Pensions Regulator (TPR) will continue to work closely with all relevant parties to achieve the “best possible outcome” for members.
In a statement, Carillion chairman, Philip Green, said: "This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years.
“In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision. We understand that HM government will be providing the necessary funding required by the Official Receiver to maintain the public services carried out by Carillion staff, subcontractors and suppliers."
TPR executive director, Nicola Parish, added: “It is too early to comment on possible outcomes for the various pension schemes connected to Carillion. In the meantime, I would like to assure scheme members that the government set up the PPF to support members of workplace pensions in precisely these circumstances.”
The latest developments will raise questions for the government, who continued to award contracts to Carillion, despite a number of profit warnings for the firm in the last year.
RMT Union general secretary, Mike Cash, said: "This is disastrous news for the workforce and disastrous news for transport and public services in Britain and RMT has been warning since Thursday night that we thought the collapse of the company was imminent.
"The blame for this lies squarely with the government who are obsessed with outsourcing key works to these high risk, private enterprises.
"RMT will be demanding urgent meetings with Network Rail and the train companies today with the objective of protecting our members jobs and pensions. The infrastructure and support works must be immediately taken in house with the workforce protected.”
Carillion currently holds government contracts in hospitals, schools, prisons and transport and has previously delivered 450 jobs for the government, representing 38 per cent of Carillion’s 2016 revenue.