Green Paper Quotes Which Mislead People into Believing Their Employer's Pension is Safe – 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.

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    Ros Altmann

    Green Paper Quotes Which Mislead People into Believing Their Employer's Pension is Safe

    Green Paper Quotes Which Mislead People into Believing Their Employer's Pension is Safe


    Paper quotes which mislead people into believing their employer’s

    pension is safe.

    by Dr. Ros Altmann

    (All material on this page is subject to copyright and must not be reproduced without the author’s permission.)


    following are quotes from the Government’s recent Pensions Green

    Paper.  They all indicate that the officials who wrote the

    Paper do not realise that our pensions law does NOT protect

    pensions.  The quotes are highly misleading, and would suggest

    to people who belong to their employer’s final salary scheme that

    their pension rights are safe.  In fact, if their employer

    becomes insolvent, they could lose all their pension (even in a

    scheme which was 100% funded at its last MFR valuation) and if the

    employer winds up the scheme while continuing in business, the

    current rules allow the employer to get away with paying only a

    fraction (often less than 40%) of the promised pension.  This

    situation undermines the whole of our pension system, will erode

    confidence if left unchecked and must be addressed as soon as



    Phrases which lead people to believe that their pension rights are

    protected by law: 


    should be able to have confidence in the pension they have been

    promised’ – Ian McCartney Foreword p.4 


    is there for a reason – to protect the pension rights of members. 

    We need to ensure that while simplifying the regulatory regime, we

    maintain consumer protection, trust and confidence’  p. 54 


    rights…are clearly protected under pensions legislation and this

    will remain the case’ – p.55 Technical paper 


    is important ‘to provide the stability and confidence that is so

    important and which members of pension schemes are entitled to

    expect.’ – p.30 Technical Annex 


    is clearly important that employers continue to honour their pension

    promise in relation to the rights that members have already

    accrued’. – p.30 Technical paper 


    Quotes which show that people are better off working for an employer

    who breaks the law, or is dishonest, because then their pensions are

    protected!  Why should pensions be protected when employers act

    illegally, but not when they act legally?


    need to be protected against dishonesty’ p.51 


    to remove restrictions so that schemes with an insolvent employer

    can be compensated for the full amount lost as a result of acts of

    dishonesty’ – p.51 


    Government tries to blame employers, but it is the legal framework

    which has allowed people to believe they are protected.  Even a

    scheme which is fully funded on the MFR can leave its members with

    no pension.  The employer will not have let their employees

    down if the funding level plunges due to market movements, but the

    law divides up the assets in an unfair way, so pensioners are fully

    protected and everyone else is not. 


    have let their employees down when they have become insolvent with

    an underfunded pension scheme’ p.2 


    Quote showing why the Government seems to have been afraid to

    actually protect pensions.  They are frightened of forcing

    employers to pay more.  But surely, if employers cannot afford

    the promises they have made, the members should be told! 


    ‘will be guided by the aim of not increasing the overall burden on

    employers providing pensions’ – p.67 


    Quote showing that Government may need to accept some responsibility

    for compensating those who have lost their pensions as a result of

    the lack of protection in law.  The situation is similar to the

    mis-selling of personal pensions, wherein financial services

    companies were forced to spend billions of pounds compensating those

    who lost out by transferring their pension due to poor advice. 

    Government encouraged (even bribed with tax relief) people to put

    their money into their employer’s pension and then prevented them

    from diversifying into any other scheme.  Government knew

    people believed their pension was safe, yet did nothing to warn

    people that this was not in fact the case. 


    aim throughout has been to ensure that victims of mis-selling

    received redress as rapidly as possible… If a pension was mis-sold,

    and a loss incurred as a result, the firm must offer redress to

    restore their customer’s financial position’ – p.80

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