Beware of pension sharks circling Carillion collapse, says trade body

The Pensions and Lifetime Savings Association (PLSA) has warned savers to be aware of predatory pensions companies following the collapse of construction firm Carillion.

Joe Dabrowski, Head of Governance and Investment at the PLSA, said one in six pension holders in the UK have been contacted by a company to discuss making changes or transferring their pension.

The report indicates that scammers may be seeking to exploit Defined Benefit (DB) scheme members’ fears about their future.

The construction giant was placed into liquidation earlier this month. Thousands of employees are still connected to the company through its generous DB scheme, but there are concerns that a large proportion of members’ pensions could disappear.

For now, Carillion’s pension scheme has been handed over to the Pension Protection Fund (PPF). Under PPF rules, anyone over the state pension age will receive their pension in full, while others will receive around 90 per cent of the promised pension, subject to a cap – currently set at £38,505 per year.

Members can choose to transfer out of the scheme, however, in exchange for a lump sum.

Mr Dabrowski said: “We call upon Regulators to act urgently to ensure that members are protected, and to take the strongest possible action against unscrupulous companies looking to take advantage of savers. Transfers should only be undertaken if they are in the best interest of the scheme member and with the right level of guidance.

“Scheme members who are concerned about the future of their scheme should gain comfort from the existence of the Pension Protection Fund (PPF).  This Pensions Lifeboat already looks after more than 300,000 member’s pensions and has the financial strength as well as experience to deal with any claims resulting from companies’ liquidation.”