Time to compensate the pension victims in full
I hear that Labour MP, Frank Field, has tabled a private member’s bill, calling for the victims of pension scheme collapses to be compensated out of the £2.6bn of unclaimed assets held in banks and building societies.
His initiative is a timely reminder that the 85,000 victims of collapsed pension schemes are still awaiting justice.
Shockingly, only around 1,000 of these people have received any help from the Financial Assistance Scheme (FAS) to date, even though the scheme was established three years ago to provide limited compensation to those who lost their pensions between 1997 and 2005.
Even those lucky enough to be eligible for help, (because they were within 15 years of their retirement date when their scheme collapsed), are only entitled to a maximum of 80 per cent of their core pension entitlement, capped at £12,000 a year - with no indexation or spouse’s pension.
To date the Parliamentary Ombudsman, a House of Commons Select Committee report, the European Court of Justice and most recently, the High Court, have all ruled that the current level of compensation is inadequate.
But Pensions Minister, John Hutton, has steadfastly maintained that the government cannot afford to increase the Government’s funding of the FAS because it would be a drain on taxpayers’ money.
Such claims ring somewhat hollow, given that barely a day goes by without reports of taxpayers’ money being squandered through mind-boggling government incompetence, ill-judged decisions and fraud.
The £12bn lost through VAT carousel fraud in recent years, the millions wasted on failed IT projects in the NHS and other government agencies, and the £4bn annual cost of an unpopular war in Iraq, spring to mind.
This is not to mention the £2.6bn which the Department for Work and Pensions managed to lose last year through incorrect benefit payments, made as a result of ‘error and fraud,’ or the £57m it managed to shell out to dead pensioners. Yes, it could afford to pay pensions to the deceased!
Pensions expert, Dr Ros Altmann, the indefatigable campaigner on behalf of the Pensions Action Group, says that paying the victims’ pensions in full would cost the government a mere £100m a year over 50 to 60 years.
The average, full pension entitlement for these people is £3,300 a year, compared to an average payout from the FAS of £1,800 pa.
If ever there was a cause which merited the use of taxpayers’ money, this is it. Most of the pension victims have worked all their lives and have paid their tax and national insurance. Some worked for the same company for 40 years.
If the government could afford to lose £3.17 billion last year in incorrect benefit payments, it can afford to pay some, or all, of this to the thousands of individuals who have lost their pensions and who now face real hardship in retirement.
If nothing else, such a gesture by the government might go some way to restoring some much needed confidence in pensions as it prepares to establish a national pensions saving scheme (due to go live in 2012) and to which it wants some 10m currently unpensioned individuals to sign up.
Absolutely right - the Government’s attitude to these people is shameful and heartless. There are times when it is actually irresponsible NOT to spend taxpayers money on sorting out a problem that affects tens of thousands of citizens. This is one of those times. The cost is not high anyway, but the Governemnt has deliberately exaggerated it to frighten MPs away from sorting this out. How many guilty verdicts does it take to make the Governemnt see sense on this? MPs will force Ministers’ hand, but I hope it is sooner rather than later.report this comment
You are quite right to highlight this issue and the government spin which in itself is indefensible, and yet more evidence of the dispicable way in which Ministers are dealing with the desperate people involved. What is needed, very swiftly, is an all party agreement to provide the necessary help, not more taxpayers money being wasted on further legal posturing. Gordon Brown is the one blocking any serious help, it may well come to haunt him, BIG style!report this comment
What does it take to bring government to account. Four times now the government have been found guilty, yet they still do nothing but hide behind lies and spin. What a sad indictment of New Labour the party of the peoplereport this comment
Spot on Pam. I am one of the 125000 people who did everything government said I should do to have a comfortable retirement. And they have shafted me. They make the pension law, they regulate the industry, they put inadequate protection measures in place. They have been found guilty in 4 investigations. Yet they won’t admit their maladminstration and they mislead MP’s and the public with lies about the cost of compensation. Meanwhile they have ensured that their pensions are rock-solid and guaranteed by the taxpayer. So why can’t they compensate us? New Labour. Old Hypocrisy. Brown (king of the means test) is tha man who can fix it and won’t. God help us if he becomes Prime Minister. Everyone will have to invest in a begging bowl.
Jim Glover. Albert Fisher Scheme Victimreport this comment
Please can someone ask the Right Honourable Tony Blair why the government has robbed the honest working people of their future pensions. I for one have lost everything from what was assured by the same governments literature, that occupational pensions were “guaranteed and protected by law”. A 2/3rds Salary as a pension is what I should have got; now I’ll be lucky to get 5%from my life time of contributions to my company pension scheme, and that is before taxation. Indecently this same government prevented me from investing in any other pension scheme at the same time, so compelling me to pull all my eggs in one basket, so to speak.
The Parliamentary Ombudsman, the Public Accounts Select Committee (P.A.S.C.) and now the high court have said that the government were wrong. The government knew only too well that was the case and were told so by their advisors in the 1990’s, but still the Government refused to do anything about the situation. Both the Ombudsman and the P.A.S.C. said it was “MALADMINISTRATION” ,we all know it was, the press and the pension professionals all say we were robbed, but still this government still smiles at the world whilst rejecting the cry’s for help from it’s own people.
The F.A.S. that this government put in is to “assist” not compensate. This package is a absolute shambles, it only “assists” to a fraction of the pension earned, and because it so complicated to work out it is a nightmare. That is only eclipsed by the knowledge that it costs more to run this “assistance” package than the victims are actually getting. Some people in my own scheme will not get a single penny even though the have contributed for over 25 years. Would the Rt. Hon Prime Minister accept that if he were in our shoes?
This shameful slight on the workers of the UK is tantamount to this government being a dictatorship….The forefathers of the Labour party would be spinning in their graves if they knew that the possible next P.M. was preventing the very people that put him where he is from getting the pensions we paid for, whilst we that are still working have the no option but to continue to pay for M.P’s and Ministers gold plated pension…
Alan Marnesreport this comment
I think the point has now been clearly established - You can’t trust Government on pensions.report this comment
The core of the problem is that the Government take the view. That because these victims are decent, honest citizens, they can treat them with complete contempt, with no repercussions. These victims are expected to see the law take all of their savings ’stolen’ to provide pensions for exisisting scheme members in reciept, and then continue to pay taxes, rates and utilities to fund even more pensions for others. Just another slap in the face for Democracy, or recipe for a revolution?report this comment
The government are just stringing it on and on hoping everyone will die. In 1997 our pensions system was, in the government’s own words, the envy of the world. In just ten years Gordon Brown has turned it into a shambles and destroyed trust. His creation and handling of the pensions crisis will be remembered by people in the futurereport this comment
The Government wonder why the man in the street doesn’t like pensions. Is no surprise when they see pensioners treated in such a shoddy wayreport this comment
If the Government managed their own finances better, providing compensation to those affected would not be an issue, but it should not be an issue anyway. I cannot understand how a Government can stand by while those who have saved hard for their retirement so that they could afford to live for the rest of their lives without relying solely on state benefits are suffering financial hardship. This cannot be swept under the carpet and confidence needs to be restored in the value of saving for one’s retirement.report this comment
Another excellent comment by Pam Atherton. The money required is roughly the same as unclaimed assets lying in pensions funds, surely an ideal purpose for this money. Alternatively HMG should refund just 2% of the £5B additional taxes on pensions since 1997.report this comment
once again another excellent article on our plight.John Hutton’s response sums this Government up,it’s a big mistake if they think we will give up after all this time and effort.report this comment
With all this publicity on the pension theft, and theft it is, more should be said about the damage it has done to the confidence the young workers have in any thing to do with pensions. Is it possible that there is no trust in pensions any more? I have none.report this comment
The Parliamentary Ombudsman can be ignored; So can the PASC; and the High Court; Iraq is a success; John Prescott is a legitimate public expense: we are dealing with some fairly delusional people here.
Personally I disagree with Frank Field on this one, the compensation should come out of Gordon Brown’s budget, not the unclaimed assets which could be better employed for financial education purposes.
Obviously until such time as full compensation is made to the unfortunate final salary scheme victims, we have a duty to remind people that they shouldn’t trust the government over pensions - especially not the new Personal Accounts which they are going to try and foist on vulnerable low earners in a few years time.report this comment
After 34 years of pensionable service, 25 years paying 6% of salary and 6 years of waiting for the BUSM Pension Scheme to windup anyone would think it is a windup. It is not. It is reality. No pension as I turn my life clock to 60 this year. Another 5 years of hard work when I should be retired. If some-one had said - you may lose it all I would have invested differently. Taxing the pensions schemes has left the BUSM deferred pensioners with nothing. Its time the government compensated those of us who have worked hard all our lives and lost their retirement dreams.report this comment
I also contributed into the BUSM Pension Scheme for 18 years; I remember being told at the time that my pension will be safe! Now in 2007 with HMG having taken their cut (in the form of tax) has left us with precisely NOTHING! To add insult to injury four different legal bodies have now told the Government that we have been treated unjustly. It’s now time to compensate us all for all that we have lost and go some way to restoring confidence in pensions and indeed the image of Politics in this Country!report this comment
4 guilty verdicts against this currupt government, and still the wait goes on. still they keep robbing pensiom funds. As a former employee of BUSM.with 25yrs sevice under belt, and a lost pension. Can the HMG please give me back what’s rightfully mine!report this comment
The plight of those in collapsed occupational schemes may be a special case but, as one who has suffered the “double whammy” of being a member of a Maxwell pension scheme and being an Equitable Life customer, I am well aware that special cases come up all the time when it comes to relying on the private sector for pension provision. So however much I sympathise with the pensioners, I also have some sympathy for John Hutton and even for Gordon Brown. After all, they are the ones who have to prioritise claims on the public purse, which are pretty much endless. We simply must realise that we can’t have our cake and eat it– that is, we can’t demand low taxes yet expect the Government to bale us out whenever anything goes wrong with our private investments.report this comment
Well said Pam. Among the blunders and associated squandering of money which is not declared to be “Taxpayers;” money but is, remember the DWP’s recent trick in sending pensioners full personal and secure identity information to each other - and guaranteeing to make good any loss suffered as a consequence.
As to John Hutton and Grodon Brown, Guilty YES - recompense NO!; Guitly YES - recompense NO!: Guilty YES - recompense NO!; Guilty YES - recompense NO! they say. Elect them? NO NO NO NO!report this comment
I am a pensions victim (an ex BUSM employee transferred to TEXON have been with the Group /company 45 years and - actually transferred and working for TEXON currently based in India) I also contributed into the BUSM Pension Scheme for over 37 years; I remember being told at the time that my pension will be safe! Now almost 63 wondering what the future will bring…report this comment
Well said Pam. Iam also a victim for the robbery of my pension from the B.U.S.M.Co.I was there for 34years. 4bodies have found them guilty surely we must get our pensions back? which is our’s in the first placereport this comment
Well said Pam.
I worked for 34 yrs at the BUSM and have been left with nothing.I may now have to work the rest of my life.
Thought Labour looked after the workers,No just themselves.
Bob Spencerreport this comment
It’s hard to understand why this Labour government is acting the way that it is over this matter, especially when so much evidence has been presented that clearly shows HMG is guilty of maladministration. I can only conclude that they are trying to save face, having made a stand against us from the very start, they can’t now be seen to back down. I and a fellow BUSM pension campaigner, attended a meeting recently with pensions minister James Purnell and three Leicester MPs, only to be told that the Government could not justify spending taxpayers on failed company pensions. When I said that this situation could be resolved at relatively low cost, we were given the answer that they could employ 800 more nurses for what it would cost to compensate us. Perhaps if, as Pam Atherton has pointed out so well, they had not lost £billions in VAT frauds etc. there wouldn’t be a need to lay off nurses now and there would be funds available to compensate us.report this comment
i worked for the busm for 13yrs. i hope that on the 26th of march the goverment will find in our favour and pay 100% of our lost pension, there is a lot of hardship because our pensions where not looked after……. cjmreport this comment
Recent reports suggest that 2 out of 5 workers do not save for their pensions due to a lack of confidence in them. I too have not contributed to any such pension scheme since October 2000 when BUSM went into aministration. I contributed to their Company pension scheme for over 24-years and it seems I may have lost every penny. I did what this and preceding Governments have desired and actively encouraged: planned and saved for my own retirement. The losses that I, and thousands of others have suffered are purely due to total failures in a system that we were assured, post-Maxwell, was now secure.
It seems to me, and the vast body of public opinion wherever canvassed, that the country should “do the right thing” by compensating scheme members for their losses. Issues of blame or liability are frankly irrelevant; it’s time for justice. In total, the sums involved, though not trivial, are eminently affordable, will spread over 60 years, and will be offset to a large degree by tax payments and savings on benefits or pensions credits that will otherwise be claimed.report this comment
I am one of many people who contributed to pension schemes believing all the information saying it was the prudent thing to do. Now I have been robbed of my savings and the government is trying to wriggle out of paying compensation. Who is going to invest in pension schemes in the future? My children have told me they are going to spend their money in different ways.report this comment
Will Tony Blairs legacy be the destruction of confidence in saving ? The FAS is simply more spin - most people are excluded - the under 50’s and members of so called solvent schemes where the employer has simply walked away from its pension scheme.Even those that are eligible only get a fraction of the pension they were promised. The PPF is not guaranteed and benefits can be reduced.The NPSS is simply a regressive tax on the lower paid whose means tested benefits will be withdrawn as a result of their contributions on retirement. What about some incentives for thrift Mr Brown ? Recognition of the Parliamentary Ombudsman’s and High Court’s guilty verdict would be a good start.report this comment
I cannot beleive the intransigence of this government. Despite being found guilty of maladministration, they still
refuse to agree to full compensation. Do I sense the hand of Gordon Brown behind this continued refusal to act?report this comment
It beggers belief that in this day and age of so called democracy, that the democraticly elected government cannot and will not pay heed to it’s own regulatory bodies. As a member of the BUSM lost pension, I ask the question, “Is this New Labour Party the New European Dictatorship, waiting for Gordon’s Little Brown Book to be issued”.report this comment
This Government has lost touch with the public and as each minister tries to protect his own personal position it has forsaken all sense of common decency. It has been told by its own institutions, including the court that it was at fault over these peoples pensions and yet continues to duck, weave and lie to try to avoid facing up to its resposibilities. The majority of MPs now support the campaign to compensate the victims properly. The sooner the Government do this the better for all concerned.report this comment