Why this scandal is worse than Maxwell – Ros Altmann

    Ros is a leading authority on both private and state pensions,annuities and
    retirement policy. Numerous major awards have recognised her work to
    demystify finance and make pensions work better for people.

  • Ros Altmann

    Ros Altmann

    Why this scandal is worse than Maxwell

    Why this scandal is worse than Maxwell

    Why this scandal is worse than Maxwell

    by Dr. Ros Altmann

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    After looking at the Government reaction in 1992 to the Maxwell scandal, it seems to me there are some very interesting comparisons here which show just how shameful the Labour response to the pension scandals of ASW and other schemes today has been – and I’m afraid it contrasts terribly with the quick and decisive action taken by the Tories in the 1990’s.  I think you will find this very interesting:

    On 4th November 1991, Robert Maxwell fell of his boat.

    32,000 pension scheme members in his 8 pension schemes discovered, shortly after, that their pension funds had been defrauded of £400m and could not afford to pay their pensions.

    What did the then  Government do?

    In less than a year, it had arranged

    • for all members’ pensions to be paid in full without interruption
    • anyone who reached their Scheme retirement age got their pension paid without delay
    • anyone needing an ill-health pension to receive it
    • all state benefits were taken back into SERPS for free and paid directly by the DSS 
    • Government set up a special trust into which it asked companies to contribute to rescue the Maxwell pensioners – this was organised by the Government.

    By contrast, 9 years on, this Government

    • has left scheme members living without their pensions
    • spent years saying it did not want to ‘raise false hopes’
    • refused to pay anyone an ill-health pension
    • refused any help to widows of those who died
    • still refuses to take people back into SERPS
    • finally set up an ‘assistance’ scheme in 2004 which, by 2006, had paid a bit of money to only about 200 people out of the thousands already over age 65!  Furthermore, most of those who have lost out will never get anything from this assistance scheme, payments are capped, are only paid from age 65 not scheme pension age and not paid in full.

    Maxwell pensioners suffered from fraud, these 100,000 or more wind-up victims had their pensions taken away from them due to Government measures and lack of warning about the risks they faced, which denied them any chance to protect themselves.  This is the verdict of the Parliamentary Ombudsman and the PASC.

    What is the Government’s idea of social justice? 

    We must get MPs to understand this is just a disgrace.
    Within a year of Maxwell falling off his boat, the then Government had organised a rescue and ensured that pensioners would get their full SERPS entitlement from the NI system.  The  Chancellor agreed an interest free loan to ‘buy’ people back in (effectively) for free. 
    Here we are, some 9 years after the first schemes failed under the new rules since 1997 (designed to protect pensions properly after Maxwell!) and thousands are still living without either their SERPS or the occupational pension they saved for.  The Government has failed to understand that the fact that what it had called the ‘Guaranteed Minimum Pension’ was neither ‘guaranteed nor ‘minimum’ is totally outrageous.  This was people’s state pension and Government said their contracted out scheme would pay ‘at least as much’ as they would have received from SERPS.  When the rules of wind-up have taken their pension away, the Government has just left people living without.
    Apparently, Mr. Hutton is now saying the DWP is finally ‘looking’ at whether they can take people back into SERPS, but will only do so if they buy themselves back in.  In 1992, it was done for free and organised within months.  I am told today’s Chancellor is refusing to put in money.
    I think it is a really startling comparison.  Even after the Parliamentary Ombudsman and PASC reports – which confirm that this is Government’s responsibility –  we are still just progressing to first base and tens of thousands have no pension at all.

    What do you think?

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