UK - Scheme members who have had their pension benefits cut under "Bradstock-type" deals will not be in line for compensation announced by the government.
Ministers bowed to pressure from Labour backbenchers and the Pensions Action Group and unveiled a £400m package to compensate scheme members who lost pension savings when their firms folded.
But the government insists victims of “Bradstock-type” deals – where trustees have agreed to waive deficit payments because forcing the sponsoring employer to pay could put the company at risk – will not be compensated.
A spokesman for the department for work and pensions said: “If trustees have reached a negotiated settlement with the sponsor, this will not apply. This system was not designed for solvent employers.”
Hewitt Bacon & Woodrow principal consultant Raj Mody said that if the £400m compensation fund was to have a “material impact”, some cases would have to be excluded, no matter how deserving.
He said: “I welcome the government establishing the compensation fund, but my general worry is that once you have signalled that cash is around, where do you draw the line?.”
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