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.
A buyout tool which provides schemes with up-to-date pricing and comparisons between insurers has been launched by JLT Employee Benefits.
The DB white paper sets out plans to review the funding regime, with 'prudent' and 'appropriate' possibly redefined. But James Phillips asks if this could this signal a return to an MFR-like approach?
The trustees of GKN's pension schemes have agreed a package of mitigation measures that would improve funding to a "more prudent level" if Melrose's offer is accepted by shareholders next week.
While the new powers are welcome, most respondents doubt it will make a difference to the outcomes for members, Pensions Buzz respondents say.