Response to Patience Wheatcroft comments on compensation for victims of wound-up schemes
by Dr. Ros Altmann
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The Times 12th September 2003
Patience Wheatcroft’s comments on the efforts by pension scheme members to recover their lost pensions are distressing. These people have been treated appallingly by our pension system and it is morally indefensible to leave them without their pensions. The UK final salary pension system is flawed. That is not their fault, they are the innocent victims who should be compensated. They did everything society ever asked of them. Saved for decades in a company scheme which they were obliged to join, were not allowed to save in any other pension and some transferred in thousands of pounds from other schemes. The Government promoted these schemes and members were always told that their pension was ‘guaranteed’, ‘safe’ and ‘secure’, that scheme assets were held separately from the company, that trustees were looking after their interests and that accrued pension rights were protected in law. There was no risk warning required from anyone. In other words, successive Governments have created a system which ‘mis-sold’ final salary pensions.
The Government measures announced on June 11th have acknowledged the flaws, and will help in the future, but will not right the wrongs of the past.
What does Ms. Wheatcroft expect these people to do? They should not have to protest and fight for what is rightfully theirs, but sadly that is what they are being forced into. To suggest that seeking redress in the courts is somehow wrong because it might prevent trustees from acting ‘even in the interests of all the beneficiaries of a fund’ is astonishing. It is the very fact that the law has prevented the trustees from looking after the pensions of all the members which is causing this challenge. The law requires trustees to confiscate some members’ contributions in order to pay other people’s full pensions, rather than permitting them to divide the assets more fairly. It is about time this terrible injustice was recognised and reversed.
Dr. Ros Altmann
Governor, London School of Economics