The regulator may need more powers to intervene - but first it must use what powers it has
“A tentative and apologetic approach that does not cut the mustard.” Frank Field’s description of the performance of the Pensions Regulator (TPR) at Carillion is merited. This line alone from the regulator’s response to MPs’ inquiries tells you why: “TPR has launched an investigation to determine if there is information that suggests we should use our anti-avoidance powers.”
It is laughably late in the day to contemplate an anti-avoidance inquiry. Even if a successful case could be mounted, it’s hard to see how significant sums be recovered. The asset-light construction giant is bust and is being liquidated. And, even if directors’ bonuses could be retrieved, the numbers will still be tiny given the pension schemes’ deficit is likely to be almost £1bn.
A deficit occurs when a salary-related pension scheme doesn't have enough assets to pay for all its future possible liabilities - ie, payouts to workers when they retire.
Carillion relies on major contracts, some of which have proved much less lucrative than it thought.
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