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Last Updated: Tuesday, 18 May, 2004, 10:08 GMT 11:08 UK
Firms face pension shortfall test
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Future pensioners are getting extra protection
A last-minute clause has been added to the Pension Bill to compel employers to make up any shortfall in their final salary pension scheme.

Employers deemed to have failed to act to close a pension black hole could be issued with "contribution notices."

The idea is deter firms from letting their pension schemes fall into the red prior to the setting up of a Pension Protection Fund in 2005.

The Pension Bill will have its third reading on Tuesday.

The new pensions regulator, to be set up once the Pension Bill becomes law, will investigate if firms have neglected their pension schemes since the government announced it would be introducing the fund last June .

The fund will act like an insurance guaranteeing that retired scheme members will receive 100% of their pension, while members still of working age will get at least 90%.

On Friday, the government took steps to head-off a possible backbench rebellion over the plight of victims of wound-up pension funds.

The government announced a 400m publicly funded compensation scheme to pay the pensions of an estimated 60,000 people who lost their pensions when their scheme was wound-up.

The Pension Bill is now expected to pass into law.


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