Pensions Action Group


Minutes by Joanne McCullough  (Professional Pensions)
30th June 2005

Ros Altmann
Dave Allen, Dexion
Robert Butler, Dalgety
Paul Holley, Perivan
John Hayter, ASW
Dennis Thayre, ASW (retired)
Jean Wade (deferred widow)

After a brief welcome, Mr Laws asked each member attending the meeting to introduce themselves and explain what had happened to their pension. First he heard from Ros Altmann, who was speaking on behalf of all wind-up victims.

Ros Altmann (RA): The government is aware of this injustice and they need to take responsibility for what is happening. We would like to take the opportunity to explain to you what is happening. We want to give you the opportunity to ask questions. And we would like to ask to know why early day motions (EDM)s put forward to try to help these people in parliament were not signed by you.

David Laws (DL): It was a matter of principle because other parties may tie it back to our plans for public expenditure. Therefore I virtually never signed any EDM because parties total everything up and ask how you are going to fund it. They may also question why something I signed my support fort did not end up in our manifesto. If it is not in our manifesto it looks like we have been making promises that we can¹t keep. So as a rule, I don¹t sign up to public expenditure motions ­ not while I was in the Treasury team.

RA: What we are talking about is not a big lump sum up front. Those who say it would be 2p on income tax is absolute nonsense. This will cost around £100m a year, ongoing for about 40 years. That money in the context of what we spend on pensions is viable. You do not need to buy annuities. We believe we should stop schemes buying annuities on wind-up because it is a waste of scheme assets.

Jean Wade: My husband worked for Allied Steel and Wire (ASW) for 28 years. Just after it wound up he was taken ill and 15 months later he died. The government have robbed me of the pension that he saved so hard for. Now I am left to live on a pittance of about £50 a week. It was a final salary scheme that he had to join as it was a condition of employment. It was 102 percent funded under the Minimum Funding Requirement, so this was a so-called fully funded scheme. The company went into receivership on the 18th of July, 2002.

Dennis Thayre: I would have received a pension of £12,000 a year before the receivers said I can¹t have it. The company asked me to stay on as a favour. During that period it went into receivership.

RA: This is a pension that the government and the Financial Services Authority said was guaranteed and safe.

John Hayter : This was a pension that we had to join and opt out of SERPS. We were forced into the position and why should we change our pensions when we were told by the government and we were advised to stay in it.

Paul Holley:  I had to join the scheme. I can not remember any government papers saying my pension might be at risk. I went to financial advisers and they told me it was a fantastic final salary scheme and that there was no need to come out of it. We had no idea there was any trouble. It went into voluntary administration and 80-100 people were affected. We now have people who contributed for 35 to 38 years getting just £17 a week.

RA: The government forced members into schemes by penalising companies that did not offer schemes. Governments wanted to encourage as many people as possible to join and stay in the schemes. It all looked hunky-dory. There were no regulations or protections in place because the government were frightened that doing so would put employers off offering schemes, and put the costs of pension provision back onto future governments. The 1995 Pensions Act told people their pensions were safe. It took away the protection that was there before and put in the priority order which means these people are paying for other people¹s pensions. There is still nothing to protect the GMP. Words like “safe”, “secure” and “guarantee” were used. If a financial services company did that it would have to compensate. How can it be one rule for government and another for everyone else? There is truly an obligation.

Robert Butler: My father had over 25 years in the Dexion scheme and it was subject to a management buy-out. There was a compromise agreement and they didn’t take on the pension scheme. They left the scheme severely under-funded. My father expected to retire at 55, now he expects to do that at 65. More than 700 people have been affected in this way.

Dave Allen: The company went into receivership in 2003 and the scheme wound up. I was a member for 37 years and would have had a full 2/3rds pension. In 1999 it had a £5m deficit and the company agreed to top it up. If I had retired at 60, I would have had a £18,000 a year pension. We were informed we would get nothing. Two months before I was due to retire in May I was informed that I would get no pension.

RA: This is the biggest social injustice I have ever seen. These are people who did what they were told, who played by the rules and who didn¹t want to live off the state. They believed they were doing the right thing, they checked out that they were doing the right thing. Every single person and piece of material said they should stay in their pension and that their pensions were safe. Yet government was removing security. How as a society can we let this happen?

JH: What we want is 100% compensation.

RA: We are trying to persuade the government that it is responsible for this. After the prime minister stood up and said he wanted to make sure these people did not face a continued loss of pension, he asked the chancellor to sort this matter out. Amicus and Community agreed the Financial Assistance Scheme. At that time it would have cost £65m to £70m a year. Now there are 85,000 people. The Treasury agreed £400m over 20 years, which was a bit of a con trick. It has told the DWP to find the money in its budget. Everything to do with the FAS has been cruel. Nobody has received a penny out of the FAS.

JH: Stephen Timms says the government is not responsible for this. All he wanted to do when we spoke to him was change the subject. He thought the FA scheme was a panacea. He also indicated that the Treasury did not want to do anything. There are more people affected by this than the Maxwell scandal. The government needs to acknowledge they are responsible for this.

DL: The Parliamentary ombudsman’s report will be very important in establishing who is responsible. When the previous governments were trying to persuade people to have employer schemes rather than rely on the State I am sure a lot of them thought it was in the public interest. They also wanted to spread costs onto employers. The issue is more about a failure to understand the balance between private and state responsibility, rather than mis-selling. If we had a system where you were free to decide which system you went into and government didn¹t say do it this way or that, we would not have so much regress to the government. There are still circumstances where people saved for 40 years of their life and feel devastated to lose that pension and who are looking to the government and saying “Is there nothing you can do?”. It is important that this is not a campaign by one political party. The more we can pin down the constituents and MPs and unions the better.

RA: Solvent employer members have been just as wronged, or more so as the insolvent members. It seems totally unjust to leave them out. Employers have a duty to support their schemes. The government has said they take a “dim view” of those employers that do not, but a dim view does not pay the bills. The money is in the bank but those people who desperately need it are not having it released to them. The government is saying that they can¹t tell trustees what to do.

DL: On the issue of getting them to change their minds, we need to wait on the report by the parliamentary ombudsman and make sure this is delivered by the start of the parliamentary session in mid October. We want to force the government to admit they have made a mistake, they have let these people down. They were careless and failed to recognise it. The sooner this is done the better. This goes to the heart of government ­ how ministers and officials have failed to understand what the impact of their actions will have on regular citizens.

Return to Documents page.

©PAG 2003-2019 (CC BY-SA)