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Government 'Is Ignoring Pension Scheme Victims'
By Tessa Thorniley, The Telegraph
United Kingdom
July 1, 2004
The Government's latest research has revealed that 65,000 people in Britain have been hit by pension schemes being wound up.
Nearly 54 percent of these scheme members have lost more than half their retirement income after companies went bust with a shortfall in their pension funds.
The new figure was published yesterday following research by the Department for Work and Pensions involving 250 final salary pension schemes.
But leading pensions expert Ros Altmann, who has spearheaded the campaign for workers, said the DWP has deliberately excluded around 50,000 scheme members because they have suffered only small losses.
"The 65,000 excludes 10,000 members who have lost less then £5 a week, those already receiving a pension from a scheme in wind-up, or members where the employer was solvent when the wind-up began, as well as any members of pension funds which started the wind-up process before 1997."
The Government is creating a £400m "financial assistance scheme" to compensate workers whose pensions were lost when their final salary schemes were wound up with shortfalls.
Ms Altmann said: "By keeping the figures down, the Government can then refuse to increase the level of compensation."
MPs and many within the pensions industry are sceptical about the lack of detail in the existing FAS proposals and concerned £400m will not stretch far enough.
Independent experts have previously estimated that £2billion will be needed to fund the compensation scheme.
The Government commissioned yesterday's research in order to develop the FAS.
Andrew Smith, Secretary of State for Work & Pensions, said that ministers want to help people who had lost a sizeable amount of their pensions. "This research takes us another step along the road to doing exactly that."
The DWP said the research had been the most extensive attempt yet to try to quantify the problem. Earlier estimates suggested around 60,000 scheme members were affected.
Nigel Waterson, Conservative pensions spokesman, said: "The recently-announced rescue package is woefully inadequate. We told ministers at the time that £400m would not be enough, and now the Government's own research confirms that the numbers affected are even higher than suspected."
Ms Altmann added: "The Government is simply trying to exclude as many people as possible from the assistance."
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