Pensions Action Group Press Release

PROTEST AT CONSERVATIVE PARTY CONFERENCE
Birmingham International Conference Centre
Tuesday 5th October 2010

The Coalition parties pressed for improvements to the compensation schemes for workers who have lost their pensions when they were in opposition but now that they are in Government they are planning to cut back the payments.

In 2006 the Parliamentary Ombudsman recommended that workers who lost all or part of their company pensions due to schemes winding up between 1997 & 2004 should receive full compensation because of government maladministration, a finding backed up by the High Court and Court of Appeal, in spite of vigorous denial by the DWP who then ignored the issue.

The last Government was forced to introduce the FAS, followed by the PPF, which they claimed would pay "up to 90%" compensation for loss of pensions", though almost no one will in fact receive that, and some victims will get only 50% or less. Crucially most inflation protection has been removed, and all of it on pre-1997 contributions which is especially hard on older members who have longer service. Inflation is back at 5% with no sign of reducing. This rate halves the real value of money in just 13 years.

Conservatives and the LibDems were justly critical of all this and argued for improvement, but the only sign of action from the Coalition so far - replacing the RPI as inflation indicator by the much lower CPI - actually makes things worse. Over the last decade RPI is up 26.6% and CPI only 19%, a divergence which will continue to grow until the pensioners die.

Steve Webb, Pensions Minister, last week declined to offer any hope of improvement for those in the FAS/PPF, and seemed to suggest that PAG ideas to save Government money will simply be swallowed up by the Treasury. So much for "Fairness" when in Government!

The PAG stand for those who worked and saved hard all their lives, "doing the right thing" and directly creating the Nation's wealth. The average "compensation" in the FAS is £6,000pa and in the PPF £4,000.

Why do those who saved for and surely earned what one judge in the Court of Appeal described as a "modestly comfortable retirement" continue to get such shabby treatment ?? Look at the £800m lobbed into the RBS pension scheme at the drop of a hat, or the £280billion spent bailing out the financial sector!

We had hoped that there would be no need in the future for our trademark "Stripped of our Pensions" protest but it would seem this is not to be. We will therefore, yet again, be performing our striptease.

The PAG can only continue to protest until the Coalition turns their fine words into social justice. All we want is what we paid for and we are not going away until we get it.

Locations & Timings:

1)    The Pensions Action Group is a non political organisation representing people who lost most, in some cases all, of their occupational pensions when their pension scheme was wound up, either because their employer became insolvent or the employer, (perfectly legally), decided to close the scheme. Such members now receive some payment from either the Financial Assistance Scheme (FAS) or the Pensions Protection Fund (PPF) depending on the date of the wind-up, but MPs and the public are being misled about the level of protection these schemes provide.

2)    Under the FAS, only pensionable service between April 1997 and the start of scheme wind-up qualifies for very limited increases. All schemes in the FAS by their very nature will only ever have a very limited post-1997 qualifying period, even though the majority of schemes actually provided escalation on all service, both before and after 1997. Under the PPF, again, it is only post-1997 service that increases in payment, but as each year passes the proportion of post-1997 service increases and in 2009 it is already potentially 12 years more than the first FAS scheme failures.

3)    Unlike the Consumer Price Index and Retail Price Index, pensioner inflation is greater because a higher proportion of their income is spent on energy, utility bills and council tax, and they do not benefit from the reductions that apply to some of the other components in the indices.

4)    The income (pension) cap that applies to FAS penalises long-service employees and, without indexation, the cap reduces in value as does the FAS pension, whereas the Government told us that the cap will retain its value!

5)    At a time of high unemployment it is almost impossible for the elderly (over 55) to gain employment and they are being denied access to even their reduced pension benefits

6)    The main reason that the government gives for not paying 100% is that the tax-payer cannot afford it. They have, though, paid at a stroke to restore bank pensions in full. The cost of the banks' very generous pensions was much, much greater than the restoration of our pensions so this argument is plainly false.