"The answer, which Frank Field’s Commons work and pensions committee will try to elicit this week, is that the trustees saw trouble coming and warned their board – which did next to nothing. They warned the Pensions Regulator, which “expressed concern”. The fund had apparently been in trouble for 10 years. Yet the auditors KPMG continued to give Carillion’s accounts a clean bill of health.
This was for a firm £5bn in debt, owing almost £1bn to its pensioners, and with just £29m in the bank. These are the same accountants as were criticised in reports following the Co-operative bank scandal. What on earth was the Financial Reporting Council doing? The council will now investigate KPMG to see whether any rules were broken during the audit. KPMG has said it will cooperate with the investigation, but has defended its role.
The trouble with Carillion remains size. It grew too big to be called to account. Its debts became so awesome, its directors so greedy, its Whitehall contacts so close, that no one dared admit it was bust. No company, least of all one supplying public services, should ever get into that position."
We should also be worried about the Pensions Protection Fund, particularly those who have not retired yet.
www.pensionprotectionfund.org.uk/Pages/PPF7800.aspx
From the Guardian.