PAG SAYS FINANCIAL ASSISTANCE SCHEME WILL LEAVE MANY PEOPLE WITH NO PENSIONS

PAG Press Release
7th March 2005

The Department of Work and Pensions (DWP) have just announced some details of how the £400million Financial Assistance Scheme (FAS) will operate. People within three years of their scheme pension age will receive 80% of their pension entitlement, up to a maximum of £12,000 a year (less than half the maximum payment under the Pension Protection Fund, which will pay out 90% of benefits up to around £25,000).  Many people will thus receive far less than 80% of their pension.

Whilst the Pensions Action Group welcomes this announcement, it believes there are still many unanswered questions. It is thought that some 15,000 people will benefit, but this still leaves well over 50,000 people with no idea of what pension, if any, they will receive.

The scheme does not include anyone who lost their pension when their solvent employers wound up the scheme. These employers acted totally legally and the pension scheme members cannot force their employers to put in more money.

No protection against inflation will be provided. People will retire with a smaller pension than they were promised and will get progressively poorer with age. 3% inflation will halve a fixed pension in just over 20 years

The proposals often use the phrase "core benefits" without defining what this means. In all pension schemes the promised benefits include spouse's pension, indexing against inflation (at least from 1997), early retirement through ill health, tax free lump sums etc. According to the Pensions Action Group, these are all considered "core benefits"

The Pensions Action Group will therefore continue campaigning until its members’ full pensions are restored

Peter Humphrey, a member  of the Pensions Action Group, said, “We note that Amicus and Community are still pursuing their legal action through the European Court, but this is likely to take several years and the investigation by the Parliamentary Ombudsman is continuing.  We should not have to fight and wait for what we were told we could rely on.  The Government has let us down, but has not accepted its responsibility here.”

Dr. Ros Altmann, who has been working with the Pensions Action Group to help remedy this social injustice added, “The Treasury has not accepted that much more money will be needed to restore the pensions to those affected.  They must be offered proper compensation, not just some assistance, because the Government is responsible for telling them their pensions were safe, encouraging them to contribute and promising them ‘guaranteed’ pensions which they were relying on for their retirement.  Society cannot just walk away from this issue and, if we want people to trust Government on pensions in future, this dreadful injustice must be remedied quickly.”

About the Pensions Action Group

The Pensions Action Group represents people who have lost most, in some cases all, of their occupational pension when their scheme was wound up, We speak on behalf of the 65,000 people from nearly 400 schemes who were told by the government that their occupational pensions were safe and protected by law.

Our aim is to ensure every affected person has full restoration of their pension entitlement:
   regardless of company,
   regardless of date of joining the scheme,
   regardless of the reason for the scheme wind-up,
   regardless of length of service and
   regardless of age.

We were told our pensions were protected by law and only want what we were promised,

Surely that is fair