Carillion's demise puts spotlight on UK pensions shortfall

London

THE collapse of Carillion Plc with more than half a billion pounds of unfunded pension commitments may increase pressure on some of the nation's biggest companies to plug their own funding gaps.

The construction and services giant employs almost 20,000 people in Britain and has a pensions shortfall of £587 million (S$1.1 billion). The government-backed Pension Protection Fund (PPF) will probably now step in to help bridge the shortfall in the company's defined-benefit schemes, but under its rules, future pensioners face a 10 per cent drop in payouts as well as a cap of about £35,000 a year.