Work and Pensions Committee chair Frank Field questioned the leadership of The Pensions Regulator after its chief executive gave evidence to the Committee in the wake of the Carillion disaster.

In correspondence between the Committee and TPR released today, 21 March 2018, Field said that TPR chief executive Lesley Titcomb and her senior colleagues' performances did not give him assurances that they could achieve the “necessary cultural change” that the regulator needed.

Giving evidence to the joint Work and Pensions and Business, Energy and Industrial Strategy (BEIS) committee meeting on 22 February, TPR defended its approach to the Carillion schemes, saying the threat of the use of powers under section 231 of the Pensions Act 2004 “may” have contributed to the agreement of a deficit reduction plan.

In a letter to TPR, Field said: “The defensive and under-prepared performance you and your senior colleagues gave before the joint committee certainly gave me no assurance that the TPR leadership is equipped to bring about the necessary cultural change.

“It would hardly have scheme sponsors quaking in their boots and it is difficult to imagine TPR emerging victorious from negotiations with a ruthless American private equity firm.”

In a letter to the Committee, TPR outlined seven occasions in which it threatened the use of section 231 on Carillion, between June 2013 and March 2014.

In a separate letter, the regulator said that it was seeking more powers from the government, which have now been laid out in the defined benefit white paper.

On Tuesday, The Department for Work and Pensions released the white paper, Protecting Defined Benefit Pension Schemes, in which it said TPR would be receiving the power to deliver punitive fines for those who have deliberately put their scheme at risk in a bid to crackdown on “wilful or reckless behaviour”.

Despite this, many in the industry felt that this was a “missed opportunity and that slow implementation means that “pension rights are still at risk from unscrupulous businesses seeking to avoid their pension obligations”.

The Committee also said that TPR appeared to become “sympathetic” to Carillion’s position following a presentation from Carillion’s former finance director Richard Adam.

On Carillion’s collapse, on 15 January 2018, its DB pension schemes were carrying an estimated £2.6bn buyout value deficit, while the Pension Protection Fund will pick up 11 out of the outsourcing firm’s 13 pension schemes, with an estimated shortfall of around £900m.

PwC, who advised the Carillion directors on its pensions liabilities and also the government on its dealings with Carillion, is now responsible for trying to salvage funds from the Pension Protection Fund.

Field 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 aspects of company management. They’re certainly expert in ensuring they get their cut at every stage.”

A spokesperson for TPR said: “TPR is a very different organisation from five years ago – we are clearer about what we expect, quicker to act and tougher on those who do not act in the interest of members.

“We called on government for more effective powers and so we welcome the proposals outlined in the DWP’s white paper. Planned improvements to our scheme funding, information-gathering and anti-avoidance powers will enable us to be clearer about what we expect from employers in relation to scheme funding and tougher where a scheme is not getting the funding it needs.”

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