Former Carillion workers who have stopped receiving ‘pension’ payments have lost up to 20% of their income because of the contractors’ collapse.
Prospect has been working to highlight the cases of around 40 people who fall outside the remit of pension guarantees that other former Carillion workers are entitled to.
They have been left in a state of limbo as the government has been unable to provide answers on whether payments, known as annual compensation payments (ACP), will be re-instated.
ACPs were negotiated for civil servants who were working in departments that were privatised and were going to lose out on pension payments as a result of the move.
Prospect deputy general secretary Garry Graham said: “The Cabinet Office are in charge of this area and need to take responsibility rather than passing the buck. The effect of Carillion’s collapse is still having repercussions and this must be acknowledged.
“Prospect wrote to David Lidington over a month ago and he is yet to reply. The government must recognise there is a gap in policy and there has been a failure to protect outsourced staff. The payments must be re-instated as well.”
Fiona Waller worked for TPS, a professional arm of Carillion, focused on design and engineering work which was previously a public sector department. The entire architects’ department was made redundant and she was entitled to ACP payments as she was over 50.
The payments served a dual purpose of compensating for a loss of pension contributions and also the redundancy itself.
Fiona took the decision that she could afford to not go back to work based on the income she was receiving including her ACP. However, the payments stopped in January after Carillion’s collapse.
She said: “There is very little information being given out about whether these payments will ever be made again. It is really distressing as losing that money has had a significant impact on my life.
“There is so much uncertainty now because of my change in income. My husband was planning on retiring this year and now can’t do that. And, after four years out of employment I am going to either have to go back to work or start taking my pension early.”
Another ex-civil servant, who wishes to remain anonymous, has also had his ACPs stopped since the collapse of Carillion. This devastating situation has forced him to take his pension early, which has reduced his pension payments by 18%. This is due to him accessing his pension early and Carillion’s insolvency has meant that his pension now falls into the pension protection fund (PPF). These reductions run into many thousands of pounds, which can never be recovered.
Since his ACP payments have stopped he has no income and has lost thousands already. Due to his age and an ongoing medical condition he cannot find suitable employment. He describes his situation as “desperate” and he is also trying to hide this financial crisis from his children as they are approaching critical exams and doesn’t want to stress them further.
Others have lost up to £20,000 a year.
Meanwhile, Andrew Black, who has also stopped receiving his ACPs, has been chasing for answers since he realised the payments he was receiving were cash. “When I found out I was being paid in cash I wrote to the PPF and pension advisory service and asked: “what am I supposed to do if my employer goes broke?”, he explained.
“I never got any advice as to what to do. I’ve taken the matter up with my MP and she initially sent my letter to the PPF but they sent it to the trustees.”
His MP sent it on to the work and pensions sub-committee in parliament, but they are unable to look at individual cases.
“Someone needs to take responsibility somewhere for what is happening. Even if we don’t have a legal right under the PPF, there is a moral obligation for these payments to be made. My pension will now be 51.6% of that which I should be entitled to if one includes the ACP and in the future will be further degraded by the difference between RPI and CPI.”
“If ACPs could not be included in the public sector pension scheme rules why did the Government Actuary Department (GAD) not ensure that it would be payable by way of a separate annuity?”, Black added.
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