Ros Altmann comment of the week – A victory for Saga – and for common sense! Pension Protection restored
by Dr. Ros Altmann
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On Friday, the Department for Work and Pensions issued consultation which will restore protection to UK final salary pension schemes. Once these measures are passed, members of these schemes will be better protected if their employer fails. In the past few months, Saga had been lobbying the Government to act and I am delighted that Ministers have listened to our pleas.
A few months ago, I found flaws in the legislation protecting UK final salary pension scheme members. Since 2005, we have had a Pension Protection Fund (PPF) in place which was supposed to provide insurance protection for all UK final salary schemes in case of employer insolvency. Scheme members were assured by the Government that, if their employer went bust, they would not be at risk of losing all their pension as had happened in the past to tens of thousands of workers. However, it emerged that loopholes in the law had left members of the George and Harding Pension Scheme high and dry when their employer failed. Despite having paid their PPF levies each year, they were refused cover and the trustees were rejected by the PPF. This meant workers and pensioners were at risk of losing much of their pension. Although this was only one small scheme, the issue that it highlighted could have applied to many thousands of others and needed to be addressed before another major pension scandal arose.
The problem related to the legal definition of the scheme’s employer but those problems are now going to be dealt with, so members can again be reassured that the promised protections should be there if they are needed.
Saga is delighted that measures are being introduced that will remedy this flawed legislation and we believe it is absolutely essential that pensions are protected properly, so that members know what to expect in future. Having a Pensions Minister who is willing to listen and act on problems is most welcome.