Bankrupt construction giant Carillion had £5bn-worth of financial liabilities when it went into liquidation – including a pensions shortfall of £2.6bn.
The figures are based on a private analysis of what Carillion’s pensions deficit would be on a full buy-out basis, according to sources reported by Sky News. The official pensions liability has been stated as being £587m.
When the £2.6bn shortfall is added to Carillion’s other liabilities, it brings the total owed when the company collapsed to approximately £5bn.
The other debts include £1.3bn owed to the banks, £630m on bonding facilities, £350m to suppliers, £170m of convertible bonds, and an unknown amount owed to the government in VAT and tax deductions from salaries.
Pension entitlements for Carillion’s 28,500 pension scheme members will now be paid out by the Pension Protection Fund (PPF).
While existing pension recipients will be unaffected, those retiring in future are likely to see a 10% cut in their pension entitlement under the PPF scheme, according to pensions experts.