A number of Carillion PLC pension funds are set for assessment for entry into the Pension Protection Fund, London, after certain companies within the group went into compulsory liquidation.
The U.K. construction group sponsors 14 defined benefit funds associated with various companies. Of the 14 DB funds, 13 are in the U.K. and one is in Canada, said Carillion's latest annual report for the year ended Dec. 31, 2016. In a financial update for the six months ended June 30, the firm said total DB assets were £2.6 billion ($3.4 billion), with a deficit of about £711 million.
The £29.6 billion PPF is the U.K. lifeboat for the defined benefit funds of insolvent companies.
"We can confirm that we have been notified that some of the Carillion group's companies have gone into liquidation and we know this news will raise serious concerns for their employees," said Alan Rubenstein, CEO at the PPF, in an emailed statement. "We want to reassure members of Carillion's defined benefit pension schemes that their benefits continue to be protected by the PPF and will continue to be protected if or when their scheme enters the PPF assessment period."
The PPF aims to assess pension funds for entry within a two-year period. Details of the pension funds potentially entering PPF assessment could not be learned by press time.
Carillion has been engaging with key stakeholders over the past few days, including the U.K. government, regarding options to reduce debt, said a separate news release. Philip Green, chairman of Carillion, said in the release that the firm was unable to secure the funding to support its business plan.
