The Government has today announced a new Consultation that will prevent a major pension scandal that could have seen thousands of UK pension scheme members once again stripped of their pensions.
A few months ago, it emerged that the Government's system of pension protection had failed and members of the George & Harding pension scheme were at risk of losing their pensions. This small scheme was the first, but experts warned that many others could be similarly at risk.
Welcoming the DWP Consultation, Dr. Ros Altmann, who campaigned for many years to persuade the Government to ensure that pension scheme members must be properly protected, said:
"I am so pleased that the Government has listened to the pleas on behalf of scheme members who were assured their pensions had been protected by UK law and suddenly discovered that protection was not there. It has been dreadful for them and the trustees as they faced the prospect of losing much of their pensions even though they were already retired. I have seen the devastating effect that losing a pension can have on people's lives and thought we had put those days behind us. I hope these new measures will restore the much-needed protection to UK pension schemes in future."
Despite paying Pension Protection Fund (PPF) levies for years and supporting the scheme, the trustees found that, when the sponsoring employer failed, flawed legislation excluded the G&H fund from the PPF cover that was supposed to apply to all UK schemes after 2005. As the original statutory employer left the scheme in 2002, members did not qualify for the alternative protection of the Financial Assistance Scheme (FAS) either.
Last year, Ros Altmann called on Ministers to remedy the legal flaws as soon as possible. It seems that this is now going to be done.
"It is reassuring to see that the Government has listened to the representations made on behalf of these members and I hope that they will be able to relax a bit more now about their futures." said Dr. Altmann.
She added: "If the new proposals are passed, G&H members will have their pensions protected by the Financial Assistance Scheme (FAS), which tops pensions up to around Pension Protection Fund (PPF) levels for members of underfunded schemes whose employers failed before the PPF started."
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