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Bill to compensate pension scheme losers

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07/03/2007

Labour MP Frank Field has tabled a private member’s bill calling for the members of collapsed pension schemes to be compensated.

In the bill, Field calls for a levy on the unclaimed pension scheme assets held in banks and building societies to be used for the compensation and to replace the members’ lost saving and investment in their pensions.

Unfortunately for the pensioners private member’s bills rarely become law, but Field will ensure that the moral pressure is kept up on the Government, whose Financial Assistance Scheme has been slammed for not paying out enough to pensioners deprived of their income.

The problem is an acute one for the collective saving and investment of retired people, as between 1997 and 2005 it is estimated that around 85,000 people lost all or part of their pension when their company went bust or the scheme was wound up.

Last month, four pensioners in this position won a High Court case against the Government, when the court ruled that it was wrong to reject totally the Parliamentary Ombudsman’s report into collapsed pension schemes.

Ann Abraham, the Ombudsman, ruled that the Government was guilty of maladministration – although the court’s decision does not confer to the pensioners the right to claim back their lost saving and investment.

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