Pensions Action Group


Richard Nicholl (Burgess)
16th August 2005

Richard Nicholl (Burgess) wrote an open letter to Tony Blair as below. A copy of this letter was sent to the media.

The Rt. Hon Tony  Blair, MP
Prime Minister
10 Downing Street

16th August 2005

Dear Mr Blair

In May of last year, you will recall that you had become very frustrated at the lack of action by The Treasury and The DWP over the injustice of some 85,000 workers who had lost their promised pensions, despite various Government assurances that Final Salary Schemes were safe, guaranteed and protected by law.

A potential Commons defeat for your Government in May 2004 precipitated the hastily conceived Financial Assistance Scheme, which ‘promised’ a totally inadequate £400m over the next 20 years to these victims, which equates to £235 each per year!

We are appalled, therefore, that despite your own involvement, no one has yet received a single penny from this fund. Worse still, the majority of those affected are excluded from it anyway! Following the initial anxiety, anger and confusion that these people have suffered, the continuous delay and procrastination by your officials is frankly deplorable.
As usual, when we look underneath the headlines, we find the devil in the detail:
There is no provision for any annual inflationary increase. So far the scheme will eventually only give anything to those within three years of retirement, and that will be limited to 80% of the amount that had been expected, with a cap of £12,000 pa. The scheme has to be completely wound up before full payments can be made. The recipients must be 65 to qualify for any payments, despite many of them having planned and saved for an earlier retirement. There is no provision at all for anyone whose company is still solvent. The net result of these barriers to assistance is that even when the scheme is finally up and running, only an estimated 15% of the 85,000 workers will receive any help at all. It is not more ways of splitting the five loaves that is needed, it is more loaves!

We have lived for several years now with your various Pensions ministers declaring that they will not give ‘false hope’. Yet, consistently, that is exactly what they have done. A Parliamentary Ombudsman report on the administration of pensions’ protection, due in July, has been postponed because of ‘late submissions by the Government’. Yet another delay causing even more stress. Unfortunately, some people have already died waiting for help, having received none of their pensions, leaving distressed and bewildered widows fearing for their financial futures.

The announcement of the Financial Assistance Scheme was initially heralded as a great step forward for the 85,000 people who had saved for their retirements and lost everything. It was a sensible move to restore confidence in savings and pensions. Unfortunately the reality is something completely different. While gullible MP’s and some of the public may have been duped by the headlines, we continue to live with the lack of any credible assistance. The only people to have gained out of the FAS so far are the actuarial profession, the pensions’ provision companies and the civil servants setting it up. The continued and irresponsible purchasing of annuities with these depleted funds is completely insane.

Mr Blair, can we ask you just two questions: Are you proud of the way your New Labour Government has treated these honest, hard working and genuine victims? What are you doing to make sure that all of them are helped properly, once and for all?

Yours sincerely

Richard Nicholl

* * * * * * * * * * * *

On Thursday 18th August 2005 The Telegraph reported:

Pension group blasts Blair in open letter
By Faith Dewey

Frustrated members of company pensions wound up with deficits have attacked the Prime Minister, claiming that despite his involvement in the scheme to help them, no one has received a penny. In an open letter to Tony Blair, members of the Pensions Action Group described the "continuous delay and procrastination" as "deplorable".

Richard Nicholl of the PAG writes: "A potential Commons defeat for your Government in May 2004 precipitated the hastily conceived Financial Assistance Scheme, which 'promised' a totally inadequate £400m over the next 20 years to these victims, which equates to £235 each per year."

The scheme covers the 85,000 members of final salary schemes which failed before the Pensions Protection Fund came into effect in April this year. The Parliamentary Ombudsman's report on the administration of pensions' protection was due in July, according to the PAG. A spokesman for the Ombudsman would not comment on whether it had been delayed, but added: "We would hope to have the report finished by the end of the year."

A Downing Street spokesman said: "Downing Street will consider the letter on its receipt."

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