It is not unusual for Work and Pensions Committee chair Frank Field to show off an impressive vocabulary when launching a salvo against political and personal foes. But even by his standards, the imagery used to put to bed the failed outsourcer Carillion has taken a turn for the macabre.
In a joint committee report into the insolvency last week, MPs repeatedly branded Carillion’s corporate culture “rotten”. Earlier this year, Field took aim at the four largest audit firms “feasting on what was soon to become a carcass”. For more creative metaphors, see our story.
As it happens, the hyperbole and acid tongue reserved for Carillion’s executives might do the pensions industry a favour.
The comments make it painfully clear that pension obligations, at least in isolation, are not responsible for the contractor’s collapse.
Indeed, the report notes that the funding levels of Carillion’s two main schemes were not unusually low. Management’s spree of acquisitions and stated disregard for funding plans needs careful scrutiny before any systemic drivers of defined benefit underfunding take the blame.
At a time when trust in pensions is low, and even members of the public enrolled in defined contribution schemes infer that they cannot rely on their savings still being there when they come to retire, this can only be positive.
Clearly, nothing will sway Field from his conviction that the Pensions Regulator is in dire need of reform. If this leads to an inflexible funding regime that punishes those businesses struggling to do right by their members, the UK will be worse off for it.
Let us hope instead that, in response, the regulator continues to take a proactive approach on developing issues.
The impending authorisation of mastertrusts looks to be one such success – a firmer steering hand on the development of suitable retirement products and a vocal stance on the still-prominent problem of scams might not go amiss.
Setting standards and tackling issues before they draw the eye of select committees can only lead to a strengthening of consumer faith in pensions.
