Money
Pensions
Commons throws out Lords pension deal
More than a hundred thousand pensioners who face the loss of a large part of their company pension are in limbo after plans to give them more compensation were thrown out by the House of Commons, writes Paul Lewis
In a cruel game of Parliamentary ping-pong MPs rejected amendments to the Government's Pensions Bill, which were introduced by the House of Lords in June. Those amendments would have increased the compensation paid from 80% to 90% of what the Government calls the 'core' pension, pay it at the scheme's original pension age rather than making people wait until they are 65, and increase the pensions paid by 2.5% a year to help beat inflation. That would have gone some way to giving these pensioners the same compensation offered by the Pension Protection Fund (PPF), which bails out pension schemes wound up after April 2005.
In an effort to buy off a further defeat in the House of Lords – which will consider the Bill again next week – the Government offered to increase the percentage of compensation "towards 90%" of the core pension. That would be achieved by making better use of the remaining assets in the pension schemes and a matching contribution by the Government.
Dr Ros Altmann, who has campaigned tirelessly for the people who have lost their pensions, points out that the 80% of the 'core' pension which the Government offers through the Financial Assistance Scheme (FAS) is worth about 65% of the full pension that people originally expected, compared with the 85% of that full pension offered by the PPF.
She told Saga: "It's pathetic. I am so sorry for these people. This is the cruellest possible way to pretend to try to help them. They are no further forward tonight to knowing what they will get or when they will get it."
Dr Altmann says a Government review of the way the FAS funds the pensions it pays, which was published on Monday, showed that it "could deliver a much better and fairer solution at no extra cost to the taxpayer" and there was sufficient money there to improve the FAS to the level of the PPF.
If the House of Lords restores its amendments, the Government may have to increase its offer again to try to force through the Bill which introduces the first stage of its major pension reforms.
