Letter to Mick Leahy asking for union support for fair compensation - Ros Altmann

    Ros is a leading authority on later life issues, including pensions,
    social care and retirement policy. Numerous major awards have recognised
    her work to demystify finance and make pensions work better for people.
    She was the UK Pensions Minister from 2015 – 16 and is a member
    of the House of Lords where she sits as Baroness Altmann of Tottenham.

  • Ros Altmann

    Ros Altmann

    Letter to Mick Leahy asking for union support for fair compensation

    Letter to Mick Leahy asking for union support for fair compensation

    Letter to Mick Leahy asking for union support for fair compensation

    by Dr. Ros Altmann

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

    Michael J. Leahy OBE
    Swinton House
    324 Gray’s Inn Road
    London WC1X 8DD

    1st May 2007


    Dear Mr. Leahy

    Your letter to ASW workers of April 2007 has been passed to me and I hope you don’t mind me writing to you, but I think there are some important issues that need to be clarified.

    Apart from the incorrect statements about the rulings of the European Court of Justice and the High Court Judicial Review, I would particularly like to comment on what you have said about the amendments to the Pensions Bill which were debated on 18th April.

    You have called these ‘unnecessary’ and I would like to explain to you why actually these amendments were very necessary and, indeed, vital to the financial future of the victims of pension scheme wind-ups, including all your members at ASW.

    These amendments were designed to ensure that the FAS is made to work properly and deliver a fair solution to this problem.  Just calling for an increase in FAS payments to PPF level, as Julie Morgan’s amendment did, will not help those in desperate need now.  Many of your members and former members of other trade unions are already past their pension age, but are getting nothing from the FAS at all, despite the Government’s announcements of billions of pounds being put into it.  There are already 10,000 people past pension age, but only around 1,000 have had any money at all.  This must change and it is urgent that changes are made immediately, rather than waiting for yet another review.  Even if the Government promised to pay 100% of their pensions from FAS, this is no use if they die before they get the money.

    The cross party amendments would have dealt with the practical issues that the Government has so far failed to remedy.

    1. They called for the FAS payments to be increased to PPF levels.
    2. They would ensure that PPF level payments start from SCHEME pension age, not from the arbitrary age 65 that the Government has decided on for the FAS.  Many of your ASW members were expecting to retire at 62, and are therefore being robbed of years of their retirement.
    3. They would allow the scheme trustees to pay PPF level benefits to members immediately, rather than having to wait for the FAS bureaucracy to kick in.  With the PPF, members get their money from the trustees as soon as they reach scheme pension age, but in the FAS people are left for years with nothing because the trustees cannot provide data to FAS and are not allowed to pay from scheme assets at FAS or PPF level.
    4. They would require the Government to make money available straight away to get emergency funding to people whose trustees do not have enough money.
    5. They would ensure that the purchase of annuities is put on hold, giving time for the review to report and thus ensuring that if, as expected, the review concludes that using scheme assets could allow FAS payments to be increased, the assets will still actually be there by the time the review is published.
    6. They call for unclaimed financial sector assets to be collected into a Pension Rescue fund and these assets could fund the increase from FAS to PPF level benefits in the long term, but members would not have to wait until the Government actually collected the assets in, they would get their pensions quickly.

    All these elements were included in the amendments and I do not see how you can describe them as ‘unnecessary’.  The fact is that just calling for an increase in FAS to PPF levels will not sort out this problem.  What is required is to make sure that money is paid from scheme pension age, not age 65 and to ensure that money gets to people who should already be retired straight away.  None of this is happening at the moment and is leaving so many people suffering.  Making them wait for more reviews is so wrong, the Government must compensate them now, before more people die while waiting for justice.

    I would be happy to discuss these issues with you and see if we can work out a way of co-operating together to bring an end to this dreadful scandal.  I have never wanted this to be a party political issue but the fact now is that it is only Labour MPs who are standing in the way of a fair and quick resolution of this issue.  We need to force the Government’s hand now, they have come so far along the road, but not far enough to stop the misery they have caused to decent working people who have done nothing wrong.  The union action in the ECJ has helped to focus Government’s mind on this issue and rather than going back to the High Court and spending more money, let’s see if we can put an end to this once and for all.

    I do hope you will take this opportunity to try to meet up and work out a resolution that will actually deal with the problems once and for all.  Please let me know if you are willing to do so and when it would be convenient for you to get together.

    With best wishes.

    Ros Altmann

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