FT letter final salary pensions confidence trick July 2005 - Ros Altmann
  • 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

    FT letter final salary pensions confidence trick July 2005

    FT letter final salary pensions confidence trick July 2005

    FT letter
    final salary pensions confidence trick July 2005

    by Dr. Ros Altmann

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


    Sir

    Martin Wolf’s pertinent analysis of the demise of UK final salary
    pension schemes should be extended to highlight the role of
    Government, alongside employers, in the ‘confidence trick’ and the
    devastating effect on scheme members. Governments were relying on
    employers to share the social welfare costs of pension support, in
    order to reduce future state pension spending. Members – especially
    in contracted out schemes – were relying on this too. Careless
    oversight of final salary schemes, recklessly inadequate official
    funding standards and Government assurances of protection, which
    never mentioned the risks of not receiving promised pensions, lulled
    members into a false sense of security. Even the FSA said final
    salary pensions were ‘guaranteed’. This allowed employers to get
    away with making the promises they could not keep. Meanwhile, tens
    of thousands of members, despite decades of pension contributions,
    are finding their retirement security shattered by this charade.
    Government must acknowledged its responsibility, own up to its
    mistakes and compensate those who believed the false assurances of
    safety. The failure of final salary schemes is the fault of flawed
    UK pension policy, not just employers.

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