Thomas Cook chiefs should hand bonuses to pension fund says MP

A senior MP has called on Thomas Cook’s “high-paid executives” to hand their bonuses over to the collapsed firm’s pension fund.

Tuesday, 15th October 2019, 4:33 pm
Former Chair of Remuneration Committee at Thomas Cook Warren Tucker, left, former CFO of Thomas Cook Sten Daugaard, former CEO of Thomas Cook Peter Fankhauser and former chairman of Thomas Cook Frank Meysman pictured, during the Business, Energy and Industrial Strategy Committee inquiry into the collapse of the British travel operator, at Portcullis House in Westminster. Picture: House of Commons/PA Wire

Frank Field, chairman of the Commons Work and Pensions Committee, said former employees of the travel company face a “long wait” to find out how much of their savings they may have lost.

The committee said that recent calculations, following correspondence with trustees in Thomas Cook’s pension scheme, mean there will “not be enough to secure their earned retirement benefits in full”.

It said the scheme is expected to have sufficient assets to provide workers with more money than if the scheme was forced into the Pension Protection Fund, but still not secure the full amount.

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It is therefore likely that some members of the scheme will not receive their full pension entitlement, the committee said.

Trustees indicated to the committee that, despite the relatively healthy level of funding in the scheme, the accounts “overplayed its position”, it said.

The Pension Protection Fund said last month that it would assess the funding levels of the Thomas Cook pension scheme.

Mr Field said: “Thomas Cook workers now face a long wait to find out exactly how much they’ve lost from their life savings, and, while their former bosses might argue that this isn’t another BHS, Carillion or British Steel, they will have a hard time justifying the millions they pocketed while the company collapsed around them.

“If they’ve had a chance to check how their own pensions are affected, perhaps the high-paid executives responsible would like to bolster the retirement of some of the workers they left behind, and give some of it back?”

Ex-chief executive Peter Fankhauser earned a bonus in 2017 which was worth more than half a million pounds in cash, a cross-party committee of MPs heard today (Tuesday, October 15).

One of five former board members giving evidence to the Business, Energy and Industrial Strategy (BEIS) Committee, Mr Fankhauser explained how “deeply sorry we are that we couldn’t save this iconic brand”.

He apologised for the distress caused to millions of customers, suppliers who were “loyal to us throughout this time” and to employees who “worked extremely hard and tirelessly”.

But Labour MP Rachel Reeves, who chairs the committee, told him that his apology “rings rather hollow” unless he is willing to “put something back”.

His bonus could be “put to better purpose” such as redundancy payments for those who have lost their jobs or compensation for taxpayers, she added.

Mr Fankhauser responded that he will “consider what is right but I’m not going to decide that today”.

Several former Thomas Cook workers attended the hearing wearing their uniforms.

Ms Reeves told Mr Fankhauser they “do your company proud” and urged him to “go away and reflect on the huge salaries you’ve earned”.