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Panorama
Government rules out pension compensation
Pensions minister Andrew Smith
Pensions minister Andrew Smith rules out compensation
The Government has ruled out compensating workers who lose tens of thousands of pounds when their occupational pension schemes collapse.

In an exclusive interview for BBC One's Panorama, shown on Sunday, 17 November at 2215 GMT, the Pensions Minister Andrew Smith admitted that the Government had a moral obligation to workers across the country.

But he said that the Government couldn't just bail out schemes that had gone wrong, even if the public was in favour of such moves.

The news will come as a disappointment to workers like those at the ASW steel plant in Wales, who face the prospect of losing most of their pension after the firm went into receivership earlier in the year.

Awful shock


We do have a moral obligation to them and workers across the country to do everything we can

Pensions Minister Andrew Smith

These workers have fallen foul of current laws that give no pension guarantees if a company winds up their final salary scheme or goes bankrupt.

Asked whether the Government would compensate ASW workers, he said: "We do have a moral obligation to them and workers across the country to do everything we can.

"When you consider the ASW workers, other workers who face losing a substantial part of a pension they've been counting on, of course I understand how they feel.

"It's an awful shock," he added.

But while Mr Smith hinted that the Government would be hoping to tackle this problem in a forthcoming green paper, he stopped short of saying that those who had been left with nothing should be compensated.

Total security

"That maybe something the public want, but there would be implications for taxation and public expenditure," he added.

He added that the Government's job was to secure a basic level of security in retirement, adding: "What people do over and above that has got to be a matter for their choice and judgement."

Mr Smith added that financial investments like pensions would always be a risk, saying: "I want to do all that I can within my powers, within the legislative framework to be able to offer greater security.

"But when it comes to investments and markets, there is no such thing as total security."



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