MP demands speedy pension fund probe

Dan Jarvis, the Labour MP for Barnsley Central, said many of the 500 members of the pension fund at Carrington Wire were worried about losing large sums of money.

Mr Jarvis said the Department for Work and Pensions (DWP) should find ways of enabling the Pensions Regulator to carry out its investigations more efficiently.

Last year, Carrington Wire, based in Elland, West Yorkshire, closed down with the loss of more than 80 jobs. Russian parent company Severstal, which bought the firm in 2006, said the decision was due to a contraction in the market for steel wire.

The chief executive of Severstal is Alexei Mordashov, who is ranked 29th by Forbes.com in its list of billionaires. His fortune is estimated by Forbes to be $18.5bn.

In a statement issued in 2010, Severstal said that “in spite of financial support and initiatives to return the business to profitability, including the consolidation of manufacturing at Elland, Carrington Wire is no longer viable”.

At the time, Severstal, which is Russia’s largest steelmaker, said management had “reluctantly concluded” that a managed wind-down of the Carrington Wire business should be implemented.

Earlier this year, representatives of the former employees at Carrington Wire said they were seeking talks with Severstal to ensure that guarantees were put in place to safeguard payments being made into the company’s defined benefit pension scheme.

In 2010, Craig Whittaker, the Conservative MP for Calder Valley, wrote to the Pensions Regulator, asking him to investigate the position of the Carrington Wire pension scheme, after Carrington Wire was sold out of the Severstal group.

Mr Jarvis wrote to Steve Webb, the Minister of State for Pensions, on behalf of Alan Hunton, one of his constituents who is a former employee of Carrington Wire, to ask why it had taken nine months for the Pensions Regulator to begin an investigation into the transfer of the Carrington Wire pension fund.

Mr Jarvis also wanted to know what protections were in place to ensure that pension commitments were honoured in cases like Carrington Wire.

Mr Webb replied: “I understand that the regulator is currently looking into the circumstances of the case of Carrington Wire.”

He urged members of the scheme who believed they may have relevant information, to contact the Pensions Regulator.

Mr Webb said the Pensions Regulator had operational independence adding: “It would not be appropriate for me to comment on the details of an individual case.”

Mr Jarvis said: “The people I’ve spoken to about this are obviously very worried. Many of them already had their retirement plans in place and were looking forward to finishing work and to a well-earned retirement.

“Now, not only have their plans been hampered but they could lose very considerable amounts of money.

“The Minister’s reply fails to tackle the problem head on. The DWP needs to address this issue as an urgent priority – so far, I regret, they have failed to do so.

“I appreciate the complexities involved in each case that the Pensions Regulator deals with. I’ll be asking the Government to look at ways of increasing the efficiency of the regulator to avoid the distress that a lengthy investigation can cause.”

A spokesman for the Pensions Regulator said: “One of the central objectives of the Pensions Regulator is to protect the benefits of members of occupational pension schemes.

“We take risks to pension schemes seriously, whether we become aware of these risks through reports from members or otherwise.

“Any investigation into the abandonment of a scheme is complex and, as such, often time consuming.

“However, legal restrictions mean that we cannot comment on individual companies or their pension schemes”

The Yorkshire Post understands that the Pensions Regulator disputes Mr Jarvis’s claim that it took nine months to launch an investigation.

A spokesman for Severstal declined to comment.