Indicating the degree to which the pensions issue will be setting the political agenda for the next general election, the government opened the new Pension Protection Fund (PPF) yesterday.
The PPF works as insurance, protecting pension investments if a company's pension fund goes bust.
Those workers who have reached normal pension age, or those in receipt of survivors' benefit or ill-health pension, would receive 100 per cent of their contributions in this case.
Employees of normal working age would expect to receive 90 per cent through the PPF, which companies will pay for using a flat-rate compulsory fee levied for each member of the scheme.
"The Pension Protection Fund has an important role to play in the changing pension landscape and in restoring confidence in occupational pensions," said the PPF chairman, Lawrence Churchill.
"It will, for the first time, provide a level of security for members of defined benefit and hybrid occupational pension schemes, giving them reassurance that meaningful compensation will be paid even if their employer goes bust."
The charity Age Concern also welcomed the launch of the PPF, with director general Gordon Lishman calling it "an important step in the process of restoring the trust that has been lost in pensions following the collapse of a number of occupational schemes."
However, Mr Lishman said there was still much to be done to restore trust.Click here to find out more about pensions.
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