This is the official website of the Pensions Action Group (PAG), which campaigns for justice for those who lost some or all of their company pension when their schemes were wound up.
We were promised (by the Government) that our pensions would be safe "whatever happens to your employer" but that was a lie. More and more people discovered to their horror that, when their employer went bankrupt, they had lost not only their job but also their pension. Some people even lost what the Government was pleased to call the "Guaranteed Minimum Pension". This could happen even if the scheme met the Minimum Funding Requirement, because the Government had set it too low; and some people with solvent employers lost their pensions too when their schemes were closed, because the Government had left a loophole in the regulations
If this has happened to you, you are not alone - there are about 150,000 people who have been affected and, through the Pensions Action Group, we've been fighting back. We started the campaign in 2003 and ever since we've been organising demonstrations, lobbying MPs and writing countless letters. We have taken the Government to the High Court and the Court of Appeal and won, in spite of Government threats to bankrupt the individual plaintifs. As a result, the Government were forced to introduce the Pension Protection Fund (PPF) to assist those whose schemes wound up after 2004 and the Financial Assistance Scheme (FAS) for those which wound up earlier.
These schemes promise that members will receive 90% of their "expected pension" which is a huge improvement but, as is often the case, the devil is in the detail, and most people will get considerably less, especially under the FAS. This is mainly because the indexation of your pension once you have retired will be negligable and so it will be eaten away by inflation - the longer you live, the less you'll get. When everything is taken into account, many people (maybe you) will get as little as 50% of what they were promised.
The Pensions Action Group believes that our pensions were mis-sold by the Government and our objective is to get full compensation for the savings which were taken from us. The Government has underwritten full compensation for savers in dodgy Icelandic banks (who were given no official assurances) and we do not see any reason why we should receive less.
But we can't do it on our own - we need your help. Pensions may seem boring and remote, but if we are successful in our campaign it could transform your retirement years and those of your dependents. Make your voice heard - come and join us!
Find fellow scheme members
If you want to make contact with members of your pension scheme, it can be difficult because neither trustees nor the FAS/PPF will hand out personal details. PAG doesn't have members from every scheme but we do cover many of them and if your write to us at email@example.com
we will try to put you in contact with other members of your scheme.
Members of the AEAT scheme are setting up a members group. There are more details here
PAG is an informal organisation. There are no membership cards or dues, no offices and no paid officers. We are supported financially only by individual donations with no corporate sponsorship and no affiliation to any political party, trade union or other organisation. Communication is primarily through the PensionsTheft Yahoo! email group and occasional newsletters - joining the email group is how you become a member of PAG. Strategy and direction are provided by 'Notch' meetings which are publicised via the email group and are open for any member to attend. For day-to-day activity, an 'Inner Notch' of 4-5 people is elected by the meeting and they co-opt others as needed. They report back to the Notch meetings and are subordinate to them.
You can contact PAG directly by email here.
How do I join?
The first thing to do is to check out our Yahoo! email group at uk.groups.yahoo.com/group/pensionstheft/ All important announcements are made here and any member can post a message so it is an excellent way to compare notes and exchange ideas. You don't need to join the group to read the messages, but joining means that you can post your own messages and, if you are a Yahoo! member, you will be able to access additional areas of the group website and control how (and whether) you receive group emails. You can join the group by sending a blank message to:
and following the instructions in the email which comes back. You will then be able to post a message to all members by sending it to firstname.lastname@example.org
We're a friendly crowd and we look forward to welcoming you.
We would also recommend that you subscribe to the newsletter alert service which will send you a short email every time a new issue of the newsletter is published so that you can download it from here. Simply send a blank email to email@example.com
The newsletter is published on a semi-regular basis, particularly before significant actions and demonstrations, and gives a convenient summary of recent activity for those who don't want to read through daily email traffic. You can also catch up on all the back issues here.
Unsubscribing is easy. To leave the email group, send a blank email to
and to stop the newsletter emails send one to
We will not pass your contact details on to any third party and no one will contact you unless you request it.
What can I do?
Once you are on board, there are lots of ways in which you can make a difference:
- Sign the on-line petition which already has over 1600 signatures.
- Write to your MP. Most MPs are sympathetic but won't do anything unless a constituent asks them to.
- Write to the candidates from the other parties. They hardly ever hear from their potential constituents, so they should be attentive, especially if you are not being supported by the current MP. That gives them the chance to look good and maybe gain some votes at the next election. Candidates are also important because they feed back to their party HQ and can therefore influence national policy.
- If you live in a devolved region (Scotland, Wales) contact your regional assembly representative. They don't control national pensions policy, but they do feed into the process. We have been having particular success with this in Wales recently.
- Contact the local media. Local journalists are always looking for stories, so tell them about what has happened to you and how you feel about it. Send letters to the editor for publication. It's all good publicity and may help to put you in touch with others in your area who are in the same boat.
- Come and join us on our next demonstration. If you've never demonstrated before, the prospect may be a little daunting but there's nothing to worry about - they are always very good-natured and we co-ordinate carefully with the police beforehand so that everything runs smoothly. You could bring your granny. Which is just as well really, because many of us *are* grannies! We'll provide you with banners and T shirts on arrival or you can bring your own. You may have heard of our trademark 'stripped of our pensions' protest which we carry out every year at the party conferences. It's been very effective at getting media coverage in spite of the fact that decency is maintained at all times (using shorts and tops from a joke shop).
So there are lots of things that we can do to help bring about change - it is limited only by our imaginations. You are not alone and your voice will make a diffence. Remember: you worked long and hard for your pension - don't let anyone take it away from you!
* * * * * * * * * * * * * * * * * * * * * * * * * * * *
Most people thought that legislation put in place after the Maxwell scandal guaranteed the safety of their pensions.
As employees of the steel company ASW found, it was perfectly possible to be fully employed from 17 to 65, contributing all the time to a final salary company pension scheme, and still be left with little other than the basic state pension
Here’s how it happened:
You transfer your pension fund each time you change jobs, or you stay with one employer for all your working life. Either way your entire pension fund is in one pot. This pot is only as secure as your final employer.
Your employer is in financial difficulties and looks for savings. Stopping employer’s contributions to the pension fund is an obvious easy saving. The fund becomes under-funded. Eventually legislation will kick in, but only when the fund has sunk to a very low level. In any case the employer can simply close the fund at any time if it becomes too onerous
Your employer goes into receivership. The fund is closed immediately and an Independent Trustee is appointed to wind up the fund. The winding-up process will take three to five years dependant on the fund size and complexity, and the trustee’s fees will be at least 4% of the fund value. That is 4% more taken out of the already undervalued fund. The Independent Trustee has to distribute the funds in a defined order. Slightly simplified this order is:
First is his fees (money people always ensure they are top of the pile);
Second is maintaining the pensions for people who have retired;
Finally any money left is used to provide pensions for the current employees and deferred pensioners.
Because the pension fund is closed, there are no further contributions being made from employers or employees. The fund cannot operate like this so it has to be wound up. Provision for the existing pensioners has to be made by means of annuities. Over the last ten years annuity rates have fallen to something like 5% for a joint life index linked pension. This means you need something like £300,000 to provide a married person’s pension of £15,000 per annum. It does not need many such pensioners to totally empty the pension fund
Whatever is left is then used to buy annuities for the currrent employees and deferred pensioners. The sum available has been vastly reduced by the trustee’s fees and the annuities bought for the pensioners. This small sum will only provide a fraction of the expected pensions.
Consider a typical example of two people with identical salary and service and just a month’s difference in age between them coming up to retirement. Joe is the eldest and retires in May with a pension of £15,000 per annum. Just after his retirement the company goes into receivership and the scheme is closed but Joe’s pension is safe and 100% protected.
Bill, however, was due to retire in June. The scheme is now being wound up. The winding up takes the money in the fund and first uses a big chunk (typically 4%) to pay the independent trustee’s costs. Next comes the purchase of annuities to maintain the existing pensions and their inflation proofing. With a dual life annuity rate at a record low of around 5% Joe alone will take £300,000 out of the fund. What is left is then split amongst the remaining employees and deferred pensioners to be used again as annuities. Typically the remaining people will get between 25% and 40% of the pension they expected. If the scheme is severely under-funded they may get nothing.
Lucky Joe thus gets his full £15,000 pension, protected against inflation. Unlucky Bill, retiring one month later, will probably get between £3,500 and £6,000. Even worse, because the winding up takes three to four years, Bill will suffer a further retention (typically 20%) until the wind-up is complete.
Pensions are a long-term investment made over several decades. It only needs one unfortunate occurrence during this time to decimate the pension you were expecting. The older you are the more vulnerable you become as you have less time to make up any loss.
As a result of this outrageous situation, the Government was forced to introduce a system of compensation which comprises of two schemes: the Financial Assistance Scheme and the Pension Protection Fund. They are very similar and both claim to provide 90% of your expected pension but there are some important differences and you are unlikely to receive the full 90% because they ignore important benefits which your scheme mat have provided.
Financial Assistance Scheme
The FAS applies to schemes which commenced wind-up between 1 January 1997 and 5 April 2005 and it is funded by the Government. It claims that it will "pay you up to 90 per cent of the pension you accrued (built-up) in your scheme before it started to wind-up". However, there are many gaps, including the following:
- Cost of living increases between the start of wind-up and your normal date of retirement (NRA) are limited to a maximum of 5% per annum.
- No post-retirement indexation is paid in respect of contributions you made prior to April 1997 and indexation in respect of contributions made after this are applied at either 2.5% per annum or the rate of inflation (RPI), whichever is lower.
- If you transferred your pension out of your scheme rather than allowing the trustee to buy an annuity for you, the FAS will calculate a 'notional annuity' for you and base the assistance payments on that. If the notional annuity is more than the pension that you actually receive, you will get less assistance.
- When you reach your normal retiring age, the FAS will calculate how much assistance is required to bring your pension (or notional annuity) up to 90% of your expected pension. If the combined total comes to greater than £29,386 (in 2010) then the assistance will be capped at this level. The cap is revised each year in line with inflation, but it only applies to people who retire in that year.
- FAS payments are only made in respect of pension paid after 14 May 2004 - if you retired before that you will get no payments for the earlier years
- Payment of a tax-free lump sum is limited to what the money left in the original scheme could have provided. All FAS payments are subject to tax, so this valuable benefit is lost.
- If your scheme permitted members to retire earlier than the Normal Retirement Age without penalty, this is ignored by the FAS.
- The minimum Normal Retirement Age which the FAS will recognise is 60.
- A surviving partner after your death will receive 50% of the payments you were receiving; many schemes were more generous.
- The FAS does not allow you to start taking your pension earlier than the NRA, even at a reduced rate, except in case of illness.
- If you take FAS payments early because of ill-health then, not only will they be actuarially reduced (unless it is a serious or terminal illness) but you will also lose some of the revaluation prior to the NRA. Even taking payments just three years early could easily reduce your payments by 25-30%.
- Many schemes made provision for extra payments to your surviving partner or dependents if you were to die before or shortly after starting to receive your pension; the FAS does not.
The message is clear - if any of the above factors apply to you, you will not receive 90% of the pension and benefits which you paid for.
Pension Protection Fund
The PPF applies to schemes which commenced wind-up after 5 April 2005. It suffers from many of the same loopholes as the FAS (although in some respects it is more generous) but has one big drawback of its own - unlike the FAS it is funded by a levy on the remaining final-salary pension schemes with no Government contribution. As final salary schemes are being wound up almost daily, there will be fewer and fewer left to pay the levy. The Government has made no commitment to underwrite the fund, so there is the very real possibility that in the future it will have to cut back on the amount which it pays to members to avoid running out of money.
So, whether your scheme falls under the FAS or the PPF, it is unlikely that you will get even the 90% which the Government is now claiming, never mind the 100% they were promising us just a few years ago. Some people will get as little as 50%. That is why we have to keep on fighting. There are 150,000 of us in the FAS and 220,000 in the PPF. If we work together we will get justice.
* * * * * * * * * * * * * * * * * * * * * * *
Seven years on, and still campaigning!
We are STILL stripped of the pensions we were told were safe, guaranteed and protected by law - the fight goes on.
* * * * * * * * * * * * * * *
Pensions Action Group Car Stickers
Vinyl car window stickers are available from:
Pensions Action Group, 36 Seaside Avenue, Minster on Sea, Sheerness, Kent ME12 2NN
The cost is 75p including postage. Cheques (made payable to Pensions Action Group) or postal orders please.
* * * * * * * * * * * * * * *
We are very interested in hearing from people who have been caught in a similar position. If you are interested in joining our action group, or finding out more, send an e-mail to: firstname.lastname@example.org