O'Rourke pays £18.5m to set up new pension

Exclusive by John Leitch



O'Rourke has paid £18.5m to set up a new money-purchase pension scheme for the 1,700 Laing Construction employees who will become part of the O'Rourke group once the takeover is complete.

Resolving pension issues has been the main reason for the delays in the acquisition of Laing Construction by O'Rourke - it completed the process of due diligence over a month ago (CJ 18 July).

The John Laing Group, which is in the process of selling off its construction wing, has an enviable final salary pension scheme with assets of over £640m. Employees enjoy a non-contributory status. The 1,700 Laing staff who will transfer to O'Rourke will find themselves paying into a money-purchase scheme in future.

The six board members of Laing Construction have been tied into the deal with golden handcuffs, while the next most senior individuals, thought to number around 50, have been induced to stay on board by an offer to boost their pension by 10% if they stay.

It was announced last week that Brian May, chief executive of Laing Construction, had resigned "by mutual consent" and that Ray O'Rourke, head of O'Rourke, would take over the post.

A source said: "O'Rourke has shown himself to be conscious of Laing staff's feelings. David Anderson, the man who was rumoured to be preparing for the post, is a much more forceful personality, not the sort that would go down well in managing Laing's senior team."

May's treatment by Laing was described by the source as "appalling". He said: "Brian was with Mowlem before joining Laing and was only advised late last year, after he'd been in the post for just six months, that a sale of construction was planned."

l Laing said on Monday that the sale of the construction business to O'Rourke will be completed by the end of next week.