Pension schemes share the load for consumers

05 March 2004
Every pension scheme in the country will give 23p per member to compensate those who have missed out due to dishonesty and bankruptcy.

The Pensions Compensation Board, set up in response to the Robert Maxwell scandal, has taken the rare step of asking all the occupational pension schemes in the UK to pay a 23p per member - a total of 32.5 million.

The board's is there to pay compensation to people if money has been dishonestly taken from a company pension scheme and the employer is insolvent.

It currently has £1.9 million in its kitty, but expects to pay more than this. It would have needed to take out an overdraft without the contribution of the UK's pension funds.

The £2.5 million is needed to fund a payment to pensioners of CW Cheney & Son, a Birmingham lock-making firm, which went into liquidation in 2001.

This is the first time in seven years the board asked pension schemes to pay a compensation levy.

But this contribution will not cover the pensions due to workers at the Birmingham-based firm, which reportedly totalled £2.9 million.