25 January 2007
European ruling gives hope for pensions compensation
John Barrett, Liberal Democrat MP for Edinburgh West, today called on the Government not to abandon those pensioners who lost their pensions before the Pension Protection Fund (PPF) was set up, after the European Court of Justice ruled that those who lost out could still be in line for compensation.
The Pension Protection Fund was established to pay compensation to those who lost thousands of pound in pension contributions after their occupational pensions schemes were wound-up. However, the fund only covers those schemes who were not yet in wind-up before the 6th April 2005, leaving around 125,000 workers facing an uncertain retirement.
The European Court of Justice said that under the European Union Insolvency directive, the UK government pension protection regime is "inadequate".
In 2006, the government rejected a call by the Parliamentary Ombudsman for people who had lost their pensions to be compensated. Instead, the Government established the Financial Assistance Scheme which offers limited help to those who the PPF will not help.
John Barrett said:
“This ruling confirms that the Government has acted outrageously in seeking to brush aside the Ombudsman’s report on pensions compensation.
“The Government should stop simply tinkering with the adequate Financial Assistance Scheme, and instead should consider extending Pension Protection Fund benefits to those people identified in the Ombudsmen’s report.
“Those people who lost their pensions before the Pension Protection Fund was established are being short changed by the Government. This ruling gives some hope that they may get a better deal.
“I will be pushing the Government hard to ensure that they now act to recognise their moral responsibility to these individuals.”