Workers Win Pension Compensation
March 11, 2008
Cosmetics workers who lost at least half their savings in a company pension scheme are among the first in the UK to become eligible for compensation.
Up to 200 staff at the former Creative Outsourcing Solutions International (Cosi) plant at Maesteg are involved.
It follows the UK government's decision to extend pension compensation to workers where the schemes were wound up and the firm remained in business.
The GMB union has welcomed the decision to compensate those who lost out.
The company scheme was wound up around eight years ago when the factory, which now has new owners, was run by Cosi.
The UK Government said the workers would have lost at least half of their savings.
Last year, the decision was taken to give 90% compensation to workers who lost their pensions when their employers went bust and that has now been extended to those who worked for firms who wound up schemes but remained in business.
Around 10,000 people across the UK could be affected by the ruling.
Minister for Pensions Reform Mike O'Brien said for most of those workers "this is going to be a very big relief indeed".
"Many of them have been very worried about their pensions. You know, the government wanted to do justice by them so they're now going to be given broadly the same sort of coverage as if they has gone into difficulties after 2004.
"They'll get the same sort of package of help. And it'll mean that some of them who were planning to retire early will now be able to retire early rather than not being able to do so which might have been the case.
"Some of them will find that the small pittance they might have got will now turn into a reasonable pension.
The exact compensation figures have yet to be worked.
The GMB union says up to 200 people may have been affected. So far only a small number of the workers have felt the loss because most are still in work.
Former government pensions adviser Ros Alltman, a leading campaigner for pension reform, believes these people suffered just as much as the former ASW steel workers who have campaigned hard for compensation after the firm went bust
Until 2003, she said it was just too easy for companies to simply wind up their schemes and leave workers out of pocket.
She said: "The law allowed them to just walk away from their pension scheme without having put in enough money to pay the pensions.
All along the government had told the members of the scheme that the law protected them which of course it didn't."
Information on World Pension Issues
Copyright © Global Action on Aging