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UK: Red faces over wrongly-worded
June 17, 2003
UK - The
government was last night facing the embarrassing prospect of pulping
thousands of copies of its pensions green paper after campaigners said
proposals contained in the document contradicted speeches by ministers
when the paper was published last week.
The Department of Work and
Pensions will also be forced to send out hundreds of letters explaining
the new wording.
One government pensions
regulator said it had taken several days for the department, which issued
the document, to clarify the situation and admit the wording was wrong.
The clause at the centre of the
dispute appeared to commit the government to protecting all occupational
pension funds going through voluntary liquidation with a lifeboat fund.
This compensation would apply retrospectively, something specifically
ruled out by the government last week.
According to Malcolm McLean,
head of the government funded Occupational Pensions Advisory Service, the
document safeguarded, among others, the pensions of 300 workers in Hull
employed by Danish shipping firm Maersk, which last year declared its
pension fund insolvent. Workers at the firm have been told they will
receive a fraction of the pension they expected. He said: "I rang the
department and told them I believed ongoing liquidations are covered by
the wording in the document. It contradicted what ministers had said, and
would have protected workers at companies like Maersk from losing 60% of
their pensions when their schemes were finally wound up."
A spokeswoman for the department said it was never the intention to apply the rule retrospectively. She said the document contained a "typo", giving the impression all schemes being liquidated "voluntarily" by the employer would be protected. "It was never our intention to [give this protection]. The regulations put before parliament clearly set out the rules and say they start on June 11." She said all copies of the green paper would be replaced and letters with the new wording would be sent shortly to holders of the document.