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Last Updated: Friday, 13 July 2007, 15:25 GMT 16:25 UK
Pensions victims 'need more help'
Pensioner
Some solvent companies are not paying out, MPs say
The government should give financial help to pensioners whose employers close down schemes even though the company has not gone bust, MPs say.

At present, assistance can only be given to scheme members whose companies become insolvent.

But the Commons public administration committee said it was "totally unacceptable" that some bosses who had not gone bust were not paying out.

The government said employers had a "moral obligation" to make payments.

'Lifeboat'

The government's Pensions Bill returns to the Commons next week.

Several amendments have been made in the House of Lords, including a measure to extend the financial assistance scheme to funds wound up by solvent employers.

Peers also voted in favour of a Conservative proposal for a "lifeboat", scheme to raise the level of compensation for victims of pension schemes which collapsed between 1997 and 2005.

Currently, these people are eligible for money from the Financial Assistance Scheme (FAS).

But the amendment seeks to raise their compensation to the better levels offered through the Pension Protection Fund.

The Conservatives say the cost can be funded in the short term through a loan from the Treasury and in the longer term through taking unclaimed assets from pension funds.

But before standing down as prime minister, Tony Blair said it would be "delusional" and "irresponsible" to promise pensioners additional benefits without being sure there was the money to pay for them.

The bill has its third reading in the Commons this week, where the Lords amendments are likely to be voted out.

This could lead to a period of parliamentary "ping-pong", with the two Houses continuing to oppose each other.

A Department for Work and Pensions spokesman said: "Solvent employers have a moral obligation to keep their pension promises to scheme members.

"The alternative would be taxpayers stepping in to make pension payments.

"But we acknowledge that this is a complex area and that there may be scope for debate about the dimensions of the Financial Assistance Scheme."


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