UK: Red faces over wrongly-worded pensions green paper

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UK: Red faces over wrongly-worded

pensions green paper

By Phillip Inman, The Guardian

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.