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26/11/2003
Company pensions to be protected from 2005
In the Queen's speech today the government has announced that a Pensions Bill will be introduced to protect company pension plans.
Under current legislation when a company closes the pension plan often vanishes as well leaving thousands of British workers faced with a no win, no-company no pension situation.
The government pledged to put in place a compulsory pension protection plan by 2005 in an effort to ensure that the promised pension was paid. But the plan will only cover new pensions and those who have already suffered financially will not be covered in any way.
The pensions industry in the UK has a mountain to climb in order to restore public confidence in pensions schemes - many of which have been severely affected by years of poor performance in the stock and investment markets.
Final salary pension schemes have been abandoned as companies opt for pensions schemes that place the pension in the hands of less secure private pension investment plans.
Unions warn that the legacy of the failure of pension plan compensation and inadequate pension provision in the UK could have severe consequences for an entire generation of retiring employees.
Employees who are currently paying in to schemes could still face the prospect of being left with nothing if a company fails.
However, the government has promised to make pension plans less bureaucratic and to reduce the costs of the administration of pension plans.
(SP)
Under current legislation when a company closes the pension plan often vanishes as well leaving thousands of British workers faced with a no win, no-company no pension situation.
The government pledged to put in place a compulsory pension protection plan by 2005 in an effort to ensure that the promised pension was paid. But the plan will only cover new pensions and those who have already suffered financially will not be covered in any way.
The pensions industry in the UK has a mountain to climb in order to restore public confidence in pensions schemes - many of which have been severely affected by years of poor performance in the stock and investment markets.
Final salary pension schemes have been abandoned as companies opt for pensions schemes that place the pension in the hands of less secure private pension investment plans.
Unions warn that the legacy of the failure of pension plan compensation and inadequate pension provision in the UK could have severe consequences for an entire generation of retiring employees.
Employees who are currently paying in to schemes could still face the prospect of being left with nothing if a company fails.
However, the government has promised to make pension plans less bureaucratic and to reduce the costs of the administration of pension plans.
(SP)
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