Pensions Action Group


Press release by Dr Ros Altmann
1st June 2006

Pension reform cannot succeed if Government refuses to compensate.

The Pensions Action Group's solicitors have written to John Hutton, Secretary of State for Work and Pensions notifying him that we are launching a judicial review of Government's decision to dismiss the Parliamentary Ombudsman's report on occupational pensions, and refusal to accept her findings of maladministration.

Leading public law solicitors and Counsel (Bindmans and Blackstone Chambers) are acting for members of failed pension schemes on a 'no-win, no-fee' basis and have given the DWP two weeks to provide its full response to the Ombudsman's report and calculations justifying the assertion that compensation would cost £15billion.  Over two months ago, Mr. Hutton promised Parliament these would be provided 'in the next few weeks', but they have not yet been produced.

The Judicial Review will claim that Government's unequivocal denial that anyone could have been misled by its literature and assurances of safety is irrational and undermines the statutory purpose of the Parliamentary Commissioner Act 1967.  We believe that no reasonable Minister could possibly reject her  findings of maladministration.  Our lawyers also advise that the Government seems to have deprived scheme members of their property rights and is, therefore, in breach of Section 6 of the Human Rights Act 1998.

Dr. Ros Altmann, pensions expert who has been representing members in their the fight to persuade Government to properly compensate victims of this dreadful injustice, said: 'These people saved for decades, just as Government told them to do, to provide themselves and their families with a pension in retirement.  Having believed and trusted Government assurances of safety, they have ended up with nothing.  The Ombudsman clearly explained that this is Government's fault, but the DWP has refused to listen.

Unless it does so, it will undermine public confidence in pension reforms unveiled in this week's White Paper.'

The White Paper on pension reform will aim to engender a new culture of saving for retirement in low cost schemes and a pension system that encourages personal responsibility.  If, many years down the line, people who follow all the rules find that something goes terribly wrong, and the Government just says they should never have done what they were told, why will anyone trust pensions again in future?  Compensation is essential, both in the interests of social justice and future pension reform.  Such compensation need not even come from taxpayer funds, as unclaimed assets could be used.  However, it must be organised urgently as those affected are in desperate need.

Ros Altmann added: 'It is sad that we must take legal action but the Financial Assistance Scheme will never help most of those affected and has so far only paid out to around 120 people, while costing £5million of taxpayers' money.  Government's response is wholly inadequate.

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