UK - The government is expected to put the cost of compensating those who have lost their pensions through company insolvency at £1.5bn - well below initial estimates.
London School of Economics governor and former government adviser Ros Altmann said the department for work and pensions was likely to come up with the figure in a report on the results of its investigations into the numbers affected which is due out by the end of June.
It is below her own estimate of £2.28bn, or £76m a year over 30 years, which includes full compensation for all scheme members who have lost out since 1995.
The DWP – which used figures from The Association of Corporate Trustees – is not expected to have included those who were affected when the sponsoring employer was solvent at the time of wind-up or cases before April 1997.
Altmann said: “They will show a much lower figure because they are using independent trustee figures. But there are a number of smaller schemes also affected.”
“I want to see a commitment to pay the pensions. They don’t need any extra money because there are enough assets in the schemes themselves. There is £70m in the ASW Sheerness scheme alone, so they would not have to find the extra money for 10 to 15 years.”
Labour MP Frank Field agreed the figure would be lower than expected, but well above the government’s proposal to pay £400m over 20 years.
“The £400m, while welcome, is pretty inadequate. When they publish this report people will realise they are not going to get anything like the pensions they expected.”
Liberal Democrat pension spokesman Steve Webb agreed and claimed the offer was likely to be £2bn short.
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