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Last Updated: Tuesday, 2 March, 2004, 22:21 GMT
Pension damages pleas rejected
ASW workers marching to Downing Street in 2003
ASW workers protested in Whitehall last year
Protesters have failed to persuade the government to compensate workers who have lost out on company pensions because their employers have gone bust.

The first Parliament debate on the Pensions Bill was dominated by calls to give retrospective help to up to 60,000 affected people.

The bill aims to safeguard workers' pension rights from 2005.

Hundreds of former employees of bankrupt firms demanded government help in demonstrations outside Parliament.

A pension protection fund, ensuring no-one loses their pension if their firm folds, is the centrepiece of a package designed to provide "simplicity, security and choice" in the sector.

What we have here, effectively, is a breach of promise
Kevin Brennan MP
However, it will not offer any help to people who have already lost their pensions under the current rules governing company pension assets.

Andrew Smith, the Work and Pensions Secretary, said the new fund would be a form of insurance policy that could not be expected to protect people against events that had already taken place.

'Retrospective compensation'

Former workers from companies such as Associated Steel and Wire (ASW), United Engineering Forgings and Dexion attended Tuesday's lobby.

The workers were joined by Labour MP Kevin Brennan, who has campaigned on behalf of former employees of ASW who paid into an occupational pension scheme for more than 40 years but now face receiving a fraction of what they are owed.

He said there was a moral, legal and public interest argument for retrospective compensation.

He said: "What we have here, effectively, is a breach of promise."

He warned that legal action was already underway and urged ministers to address the issue in the bill.

None of us, if taking out car insurance next week, would expect it to cover us for an accident we had last week
Andrew Smith
But Mr Smith said it would not be possible to compensate workers already left high and dry by closures.

He said: "It is essentially an insurance scheme and no insurance scheme can protect you against events that have already happened.

"None of us, if taking out car insurance next week, would expect it to cover us for an accident we had last week."

Under current laws, when a company folds or a solvent employer chooses to wind-up a company pension scheme, existing pensions are protected.

But those who are approaching retirement often lose out because they are last to be paid when assets are distributed.

Mr Smith recently acknowledged for the first time that as many as 60,000 people may have lost their pensions in this way.

However, the government has not committed itself to compensating those workers who have lost out.

Tony Blair recently told the House of Commons: "I have immense sympathy for them, other scheme members and other people in a similar position. We are looking at what we can do to help."

Further consideration

Bosses would be forced to consult staff over changes to pension schemes, under the new bill, which also aims to improve pension protection, make schemes easier to run and help encourage people to plan properly for their retirement.

And employees would not lose pension benefits if they changed jobs regularly or if their firm was taken over.

The bill received its second reading without a vote and will now go into committee for more detailed consideration.




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