Government accused of being unable to fulfill pension promises
24 February 2004
The government has today been accused of being unable to make good on their promises to protect individual pensions when firms go bust.
Actuarial consultants Lane Clark & Peacock are disputing the clause written into the new Pension Bill, which promises 100 per cent compensation from the Pension Protection Fund in cases where private pensions are rendered insolvent when employers go under.
Francis Fernandes, partner at LCP, suggests that unless the discrepancy is not investigated then pension-holders will only receive a sum much lower than they may have got had their company stayed in business.
The firm claims the Bill only covers the pension's value at the time of insolvency and fails to cover any possible increases in value over time.
The Pension Bill will create the Pension Protection Fund for employers operating pension schemes on behalf of their employees. If Parliament supports the Bill, the fund should then compensate workers if they do not receive their pension.