UK - The government must put another £2.6bn into its Financial Assistance Scheme to compensate workers who have lost pension savings, Ros Altmann claims.
The London School of Economics governor and former Downing Street pensions adviser says that the government’s offer of £400m over 20 years should be increased to £75m per year for 40 years.
This, she said, would give the 65,000 workers who have lost up to 90% of their pensions through company insolvency a larger proportion of their benefits.
The £400m package, which was unveiled in May, has been described as “grossly inadequate” as it will only give staff about 20% of their pension.
Altmann said: “The FAS is nowhere near enough and it is clear that the government wants to exclude as many people from it as possible. It should bring in the Pension Protection Fund immediately and offer £75m a year for 40 years.”
The extra money - paid for by taxpayers - would help compensate those in the Turner & Newell pension scheme, who are not expected to receive either the FAS or the PPF if the scheme winds up.
Workers at the firm - the UK arm of beleaguered US car component giant Federal Mogul - will only receive a fraction of their benefits as the scheme has a deficit of around £875m.
Altmann, together with Conservative parliamentary spokesman Andrew Bingham, described a meeting with a dozen T&N members as “gut-wrenching”. Several workers are just months off retirement after many years with the company.
The Pension Protection Fund (PPF) is consulting on proposals to charge a "risk reflective" levy for commercial defined benefit (DB) consolidation vehicles.
The funding gap across FTSE 350 schemes could be slashed by as much as £275bn if schemes look beyond traditional ways of creating value. Victoria Ticha examines how
There will be "many flavours" of defined benefit (DB) consolidators but consolidation will only be the right answer for a minority of schemes, Alan Rubenstein says.
Work and Pensions Committee (WPC) chairman Frank Field has questioned the regulator on what lessons it can learn from the experience of the Kodak Pension Plan No.2 (KPP2).