11 May 2007
TIME TO EXTEND FINANCIAL ASSISTANCE TO ALL PENSIONERS HIT BY CLOSED PENSIONS, SAYS PASC
The Public Administration Committee today calls on Government to extend its plans so that all people who lost their pensions when their company pension schemes wound up receive the same assistance.
Last year the Parliamentary Ombudsman investigated the cases of those who had lost their expected pensions and found that the Financial Assistance Scheme (FAS) as it was then constituted was not a sufficient remedy for their losses, a finding supported by PASC but contested by Government, and which has been taken right up to the High Court.
The Government’s concessions and improvements to the FAS in light of the reports and High Court findings are welcome but the Committee says they do not go far enough. Government should extend the Financial Assistance Scheme to apply to all schemes which began to wind up before the new regime brought in by the 2004 Pensions Act came into operation. This would mean including pension schemes that were wound up by solvent companies, not just those closed because an employer became insolvent.
The Government has said it will consider solvent employer schemes in a review due later this year, but the Committee says that this is “not good enough”. The government should take the opportunity of the current Pensions Bill, now before the House of Lords but due to return to the House of Commons if the Lords amend it, to extend assistance to all those who lost their pensions.
Tony Wright, Chairman of the Public Administration Committee, said:
“We fully understand the Government’s unease at the taxpayer having to provide cover for pensions that were promised by employers and should be honoured by employers. However, those who have lost their pensions entitlements from schemes closed by solvent employers face exactly the same problems, from the same lack of regulation and lack of information, as those whose employers became insolvent. At this point, this is the only way they can be helped, and they must be.“
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The Committee was nominated on 13 July 2005. Its terms of reference are to examine the reports of the Parliamentary and Health Service Ombudsmen, and to consider matters relating to the quality and standards of administration provided by Civil Service departments, and other matters relating to the Civil Service.
The Membership of the Committee is as follows:
Tony Wright (Chairman) (Lab) (Cannock Chase), Mr David Burrowes (Con) (Enfield, Southgate), Paul Flynn (Lab) (Newport West), David Heyes (Lab) (Ashton under Lyne), Kelvin Hopkins (Lab) (Luton North), Mr Ian Liddell-Grainger (Con) (Bridgewater), Julie Morgan (Lab) (Cardiff North), Mr Gordon Prentice (Lab) (Pendle), Paul Rowen (Lib Dem) (Rochdale), Charles Walker (Con) (Broxbourne), Jenny Willott (Lib Dem) (Cardiff Central)
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