The Parliamentary Ombudsman has accused the government of misleading workers over the security of final salary pension schemes. The damning report published today by Ann Abraham says official information provided by the Department of Work and Pensions and other government bodies was ‘inaccurate, incomplete, unclear and inconsistent’.Much of the criticism concerns government information leaflets which failed to tell people about the risks of occupational pension schemes.
The Parliamentary Ombudsman said they also gave inaccurate information by telling members they would receive the full value of their pension if their scheme was wound up.The inquiry was launched after an estimated 85,000 workers lost all or part of their pensions after their employers went bust, mainly in the manufacturing and engineering industries.The findings could lead to the taxpayer having to foot a GBP 5 billion compensation bill for those who lost their occupational pension when their company went bankrupt.
Financial Assistance Scheme
But the government has rejected the majority of the findings and said it would not be paying out any compensation beyond that already offered to people through the Financial Assistance Scheme.It set up the GBP 400 million scheme to help people who lost their pension as a result of their company going under before the new Pension Protection Fund was set up.But only about 15,000 people are eligible for payouts under the scheme and only a handful have so far received any money.