Carillion sells contracts.

[box2box]

Aye that was PwC. They said the problem was the early recognition of income and delayed recognition of expenses. Pretty f***ing fundamental really

In the Tesco example the external auditors flagged the issue, in the carillon case there doesn't seem to have been the same level of scrutiny. More importantly in the case of carillon with extensive long term contracts I am sure if a contract loses money in one year a provision has to be made for loses for the remaining length of the contract which could have been a huge loss, not sure if this was being adhered to either.........

 

[Boz33]

Sadly there are companies with much bigger deficits than that as well. Ultimately as long as they can prove to the regulator that they have a long term plan to go back into surplus, it's allowed.

The PPF will now pick up the costs of the Scheme, although I suspect premiums will now increase for other schemes.



There won't be any theft mate, but a plan would have been in place to try and get the scheme in surplus ASAP. Remember independent actuaries would have had to sign off on the triennial valuation so the deficit would have been taken into consideration then.

I've no doubt there are other companies with huge pension holes than carillion, although if the numbers that have been touted as possible are true.....£2.6bn, these haven't just been created in the last year or two, so any long term plan that may have been put into place obviously wasn't sufficient as the hole was growing year on year I suspect, so why wasn't this flagged and addressed properly.

I suspect in a lot of cases carillion was effectively buying work...pricing way under what it could actually be achieved for, thus compounding their problems year on year, making the order book look super healthy, but having the effect of just building up debt mountains.
the practice of giving out dividends when they did make profit even with a massive pension hole, or the practice of handing out mega bonuses to directors when the company is losing money is absolutely abhorrent to me personally

No doubt this will take years to sort out, but if there's been any wrong doing I think those guilty should be brought upon charges and certainly directors should be barred from running companies again.

Also as I said in my previous post, if companies have got pension holes there's nothing to stop us as a country saying , you know what...no profits paid out as dividends till the holes are filled, and absolutely no bonuses for directors
Rewarding shite management just seems an absolutely abhorrent thing to do

 

[yamar1]

Teresa Mays husbands company has very close ties to G4s - but I'm sure they got their contracts through open and fair competition.

Im sure they did.

 

[Niblet61]

Also as I said in my previous post, if companies have got pension holes there's nothing to stop us as a country saying , you know what...no profits paid out as dividends till the holes are filled, and absolutely no bonuses for directors
Rewarding shite management just seems an absolutely abhorrent thing to do

Really? Is this legislated somewhere? If it is then this should be done every time to every company.

 

[Boz33]

Really? Is this legislated somewhere? If it is then this should be done every time to every company.

Not in legislation at the minute but there's absolutely nothing to stop us bringing it in if there's a will in parliament.
The more these types of pension holes are found the bigger and bigger mess the pension system will become if it's not addressed, although I suspect it's pretty fucked anyway now.
At the minute the ppf will pick up the tab meaning most will be protected to 90% but if more and more schemes collapse, the premiums for the ppf will invariably either rocket up or the payouts may just decrease, may get to a point where people are only protected to 80% or 70% or even less in the future.

 

[JohnAin]

aye, and attend the same lodges, golf courses, swingers parties etc..

Why do we continue to tolerate this nonsense?

It's predominantly the Tories of course, that will always been so because that lies at the heart of their revolting culture. (wow, what an oxymoron)

However, the same things occurred when Blair and his cronies abandoned their heartland and turned into pseuto-Tories.

It was us, the electorate who sat still and did nothing. To our shame

Time now to end this rubbish.

Not in legislation at the minute but there's absolutely nothing to stop us bringing it in if there's a will in parliament.
The more these types of pension holes are found the bigger and bigger mess the pension system will become if it's not addressed, although I suspect it's pretty fucked anyway now.
At the minute the ppf will pick up the tab meaning most will be protected to 90% but if more and more schemes collapse, the premiums for the ppf will invariably either rocket up or the payouts may just decrease, may get to a point where people are only protected to 80% or 70% or even less in the future.

It is the "will in parliament" that is a huge part of the problem. Parliamentarians are allowed second jobs and consultancies with these companies. They will never piss on their chips.

When I was a kid even Tory MPS would have baulked at the stuff that is commonplace now.

 

[viccarlton]

If our Mining/Coalfields, Steel, and Shipbuilding were not worth saving then neither is this shambolic outfit of a company. Let it be a lesson as to why Privatisation of our Public Services has been epic failure

Have always been loyal (not much choice) and defended Royal Mail and the service they provide, now this isn't a dig at the posties as they are the men and women on the streets (literally) but something drastic has gone wrong/changed recently.
Having never previously had any mail lost either being sent by or delivered to me all has changed of late, prior to Christmas I had a letter sent to me go missing that has still not arrived ( presumed Christmas backlog) I had another item sent to me that arrived one month after it was posted and the latest episode is I had something posted to me last week 22nd (yes I know it's only a week) 2nd class signed for and it still has not arrived, have spoken to Royal Mail and it's not officially *lost* until 6th of Feb. something has changed and it's not for the better.
I know there are some posties get on here but can't remember who they are ?
Maybe I should open a new thread on this as the posties may not read it under this banner.

 

[Hoon]

Carillion: 377 workers to lose jobs

Nearly 380 workers at Carillion are being made redundant, but the body in charge of liquidating the business said it had saved 919 jobs.

 

[weebil64]

Carillion: 377 workers to lose jobs

Result!

 

[Pop]

I've no doubt there are other companies with huge pension holes than carillion, although if the numbers that have been touted as possible are true.....£2.6bn, these haven't just been created in the last year or two, so any long term plan that may have been put into place obviously wasn't sufficient as the hole was growing year on year I suspect, so why wasn't this flagged and addressed properly.

I suspect in a lot of cases carillion was effectively buying work...pricing way under what it could actually be achieved for, thus compounding their problems year on year, making the order book look super healthy, but having the effect of just building up debt mountains.
the practice of giving out dividends when they did make profit even with a massive pension hole, or the practice of handing out mega bonuses to directors when the company is losing money is absolutely abhorrent to me personally

No doubt this will take years to sort out, but if there's been any wrong doing I think those guilty should be brought upon charges and certainly directors should be barred from running companies again.

Also as I said in my previous post, if companies have got pension holes there's nothing to stop us as a country saying , you know what...no profits paid out as dividends till the holes are filled, and absolutely no bonuses for directors
Rewarding shite management just seems an absolutely abhorrent thing to do

Market conditions and many other factors can increase deficits, it is flagged when the schemes provide updates and valuations regularly.

A pension scheme has to negotiate with the company to get the necessary contributions paid, they are a totally separate entity. Most companies with pension scheme deficits will already be pumping millions in deficit contributions year on year, that is on top of paying regular contributions and pension benefits for everyone not in the old final salary schemes.

The trustees of most schemes have to walk a fine line as pension scheme deficits can bankrupt a company and it is better having a company there to pay something rather than nothing at all.

It isn't as simple as saying pay us x now to sort this deficit. It will cost millions every year just to administer the Carillion scheme, that is before they've paid any pensions.

 

[Boz33]

Market conditions and many other factors can increase deficits, it is flagged when the schemes provide updates and valuations regularly.

A pension scheme has to negotiate with the company to get the necessary contributions paid, they are a totally separate entity. Most companies with pension scheme deficits will already be pumping millions in deficit contributions year on year, that is on top of paying regular contributions and pension benefits for everyone not in the old final salary schemes.

The trustees of most schemes have to walk a fine line as pension scheme deficits can bankrupt a company and it is better having a company there to pay something rather than nothing at all.

It isn't as simple as saying pay us x now to sort this deficit. It will cost millions every year just to administer the Carillion scheme, that is before they've paid any pensions.

In the case of carillion it's obvious that whatever they have been putting in extra to the normal contributions and workers bit wasn't even stopping the slide.... I'm guessing this was even going on when they were handing out bonuses to directors and paying out dividends.
Pricing jobs so low just to get the work even if they weren't even coming out even is no way to run a company and so we end up with a massive balls up and debt mountain like we have seen....I'd suggest no company shoul be paying out dividends on any profits unless the pension holes were covered first.
This pension hole hasn't magically appeared over the last couple of years it's been mismanaged for a lot longer than that, yet those running the company deemed it acceptable to hand out bonuses to execs and dividends to shareholders, how is that in any way a responsible way to run a company

 

[Wilfy]

In the case of carillion it's obvious that whatever they have been putting in extra to the normal contributions and workers bit wasn't even stopping the slide.... I'm guessing this was even going on when they were handing out bonuses to directors and paying out dividends.
Pricing jobs so low just to get the work even if they weren't even coming out even is no way to run a company and so we end up with a massive balls up and debt mountain like we have seen....I'd suggest no company shoul be paying out dividends on any profits unless the pension holes were covered first.
This pension hole hasn't magically appeared over the last couple of years it's been mismanaged for a lot longer than that, yet those running the company deemed it acceptable to hand out bonuses to execs and dividends to shareholders, how is that in any way a responsible way to run a company

They were deferring pension payments.

 

[Pop]

In the case of carillion it's obvious that whatever they have been putting in extra to the normal contributions and workers bit wasn't even stopping the slide.... I'm guessing this was even going on when they were handing out bonuses to directors and paying out dividends.
Pricing jobs so low just to get the work even if they weren't even coming out even is no way to run a company and so we end up with a massive balls up and debt mountain like we have seen....I'd suggest no company shoul be paying out dividends on any profits unless the pension holes were covered first.
This pension hole hasn't magically appeared over the last couple of years it's been mismanaged for a lot longer than that, yet those running the company deemed it acceptable to hand out bonuses to execs and dividends to shareholders, how is that in any way a responsible way to run a company

You know that for a fact? You’ve read all the actuarial valuations for the last 20 years?

You do realise most schemes are in deficit? The public sector schemes are billions in the red.

They were deferring pension payments.

That was only fairly recently and I mentioned this earlier, the trustees had a difficult choice to make, work with the company as it was and try to get more cash from the banks or risk the company going bust.

Obviously the company has now gone bust but I’m not sure they could have done anything else in the circumstances.

 

[Boz33]

You know that for a fact? You’ve read all the actuarial valuations for the last 20 years?

You do realise most schemes are in deficit? The public sector schemes are billions in the red.



That was only fairly recently and I mentioned this earlier, the trustees had a difficult choice to make, work with the company as it was and try to get more cash from the banks or risk the company going bust.

Obviously the company has now gone bust but I’m not sure they could have done anything else in the circumstances.

If the figures of about £1bn quid + are anywhere near accurate I'd say it was nailed on they weren't addressing the problem properly when they were making profit, unless you think the pension pot can rack that much up in deficit from a couple of years alone?
Paying out dividends or indeed director bonuses of any kind when there's massive holes in the pension scheme is wrong on so many levels it's hard to know where to start on how badly the company has been ran, and if it's found that they had been deferring pension payments, yet paying out bonuses and dividends that's even more reason for the directors to be vilified and action to be taken so other companies know in the future this can't and shouldn't be allowed, even if it takes changes in law to enforce responsible behaviour.
As for public sector schemes, joe bloggs the tax payer will no doubt have to cough up, as well as people having to take lesser pensions and or increasing their contribution. Pensions are a massive ticking bomb and it needs to be addressed or at some point the whole thing will collapse and the poor saps will end up with fuck all

 

[Pop]

If the figures of about £1bn quid + are anywhere near accurate I'd say it was nailed on they weren't addressing the problem properly when they were making profit, unless you think the pension pot can rack that much up in deficit from a couple of years alone?
Paying out dividends or indeed director bonuses of any kind when there's massive holes in the pension scheme is wrong on so many levels it's hard to know where to start on how badly the company has been ran, and if it's found that they had been deferring pension payments, yet paying out bonuses and dividends that's even more reason for the directors to be vilified and action to be taken so other companies know in the future this can't and shouldn't be allowed, even if it takes changes in law to enforce responsible behaviour

No, it won't have wracked up a 1 billion deficit in two years but you seem to be ignoring the point that most defined benefit schemes are in deficit and it is not as simple as saying fund the deficit now and spend money on nothing else.

The teachers pension scheme has a 15 billion deficit, should the government divert funds away from other services to bridge that gap right away?

 

[Boz33]

No, it won't have wracked up a 1 billion deficit in two years but you seem to be ignoring the point that most defined benefit schemes are in deficit and it is not as simple as saying fund the deficit now and spend money on nothing else.

The teachers pension scheme has a 15 billion deficit, should the government divert funds away from other services to bridge that gap right away?

Who has said spend nothing on anything else? I'm making the point that dividends and bonuses to execs shouldn't be paid if company pension schemes are in deficit.
Every penny that's spent on that is a penny less that can be put into the pension schemes to address the holes.
Who cares if shareholders and directors get money or not, I'd prefer rules brought in that they are the last to be rewarded

 

[Pop]

Who has said spend nothing on anything else? I'm making the point that dividends and bonuses to execs shouldn't be paid if company pension schemes are in deficit.
Every penny that's spent on that is a penny less that can be put into the pension schemes to address the holes.
Who cares if shareholders and directors get money or not, I'd prefer rules brought in that they are the last to be rewarded

You are ignoring the point that most final salary schemes are in deficit, including most of the public sector ones, it is not uncommon.

The pension scheme is a totally separate entity to the company, a company exec has no bearing/influence on the performance of a pension fund, how is it fair to measure their performance over something they can't control?

 

[ProfessionalMackem]

Why do we continue to tolerate this nonsense?

It's predominantly the Tories of course, that will always been so because that lies at the heart of their revolting culture. (wow, what an oxymoron)

However, the same things occurred when Blair and his cronies abandoned their heartland and turned into pseuto-Tories.

It was us, the electorate who sat still and did nothing. To our shame

Time now to end this rubbish.



It is the "will in parliament" that is a huge part of the problem. Parliamentarians are allowed second jobs and consultancies with these companies. They will never piss on their chips.

When I was a kid even Tory MPS would have baulked at the stuff that is commonplace now.

Whilst I agree wholeheartedly with the sentiment of your post. Im not sure how you can blame the electorate. We have a sham democracy with this status quo of two party system. No matter who we vote. We still get fucked over. The politicans are supposed to look out for us. But it seems every single one turns into a money grabbing kernt soon as they reach London.

No, it won't have wracked up a 1 billion deficit in two years but you seem to be ignoring the point that most defined benefit schemes are in deficit and it is not as simple as saying fund the deficit now and spend money on nothing else.

The teachers pension scheme has a 15 billion deficit, should the government divert funds away from other services to bridge that gap right away?

Two wrongs make a right?

Pensions schemes should not be in deficit.

 

[Boz33]

You are ignoring the point that most final salary schemes are in deficit, including most of the public sector ones, it is not uncommon.

The pension scheme is a totally separate entity to the company, a company exec has no bearing/influence on the performance of a pension fund, how is it fair to measure their performance over something they can't control?

The public sector bills will be picked up by us tax payers, as essentially we are the employers of any public sector workers.
The private pension schemes although seperate to the company, are still linked and any shortfall should be addressed by the company itself, if they aren't performing that's neither here nor there in respect to their responsibility to them and ultimately to their employees. If changes need to be made whereby further contributions have to be mad to make up the short fall, that's tough shit on the company because as more and more schemes tumble, more and more people are going to be fucked over

 

[Pop]

Whilst I agree wholeheartedly with the sentiment of your post. Im not sure how you can blame the electorate. We have a sham democracy with this status quo of two party system. No matter who we vote. We still get fucked over. The politicans are supposed to look out for us. But it seems every single one turns into a money grabbing kernt soon as they reach London.



Two wrongs make a right?

Pensions schemes should not be in deficit.

No they shouldn’t but it’s not always the fault of the employer if they are.

The public sector bills will be picked up by us tax payers, as essentially we are the employers of any public sector workers.
The private pension schemes although seperate to the company, are still linked and any shortfall should be addressed by the company itself, if they aren't performing that's neither here nor there in respect to their responsibility to them and ultimately to their employees. If changes need to be made whereby further contributions have to be mad to make up the short fall, that's tough shit on the company because as more and more schemes tumble, more and more people are going to be fucked over

So if your the FD of a company which has a final salary scheme that suddenly loses loads of assets due to a poor investment strategy, you are saying it’s the FD’s responsibility to right that even if you aren’t a pension scheme trustee?