[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 16 November, 2004, 17:04 GMT
Government to face pensions probe
Pension protestors
Up to 65,000 workers may have lost their pensions
An inquiry into whether the government misled workers over the safety of occupational pension schemes is being launched by the Parliamentary Ombudsman.

Ann Abraham said she would look into the actions of four government departments, including the Treasury.

The government has put aside 400m to compensate people who have lost out from pension schemes being wound up.

However, critics argue the fund is inadequate and does not address the scale of the problem.

All wound up

Anything which throws further light onto the successive failures of UK governments to properly protect the expected pensions of occupational scheme members can only be beneficial
Michael Leahy, Community trade union

Ms Abraham said she had received about 100 complaints from members and trustees of pension schemes across the UK.

These included former employees of companies which are now insolvent and whose schemes have been wound up, schemes that were in administration or from people whose pension schemes were in doubt.

Up to 65,000 UK workers have lost their pensions following scheme wind-ups.

Under wind-up rules, the assets of the pension scheme have to be used to guarantee the pensions of retired members.

Those scheme members who have not yet retired have to make do with whatever is left and as a result many have lost all or part of their pension.

Ms Abraham has written to MPs to tell them that she will be investigating to role of several key government departments in the occupational pensions crisis.

The government departments being investigated include:

  • Department for Work and Pensions
  • Occupational Pensions Regulatory Authority (OPRA)
  • HM Treasury
  • National Insurance Contributions Office, part of the Inland Revenue

Failures

A union representing hundreds of workers at Allied Steel and Wire (ASW) who lost nearly all of their pension when their firm went into receivership in 2002, welcomed the investigation.

"Anything which throws further light onto the successive failures of UK governments to properly protect the expected pensions of occupational scheme members can only be beneficial," Michael Leahy, general secretary of the Community trade union, said.

However, the Ombudsman will not be investigating the City watchdog the Financial Services Authority (FSA).

The FSA has been criticised for issues leaflets which until relatively recently described employer pension promises as "guaranteed".

Ms Abrahams said that the actions of the FSA was outside her jurisdiction.




RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific