Information on Loughborough

Pensioners Pensions

Posted on 18/12/2007
T. Robson

pensioners in london meeting Loughborough MP Andy Reed

Loughborough MP Andy Reed welcomed news today that Leicestershire pensioners from the collapsed BUSM scheme are to get greater help following an announcement from the Labour government today.

Some 125,000 workers who lost pensions when their employers went bust before 2005 are to be given greater help, the government announced today. Some of them are part of the collapsed BUSM scheme in Leicestershire.

Measures will bring them in line with other workers covered by the Pensions Protection Fund, set up two years ago. The move will see 90% of the value of their pensions restored.

Andy Reed said “Since I heard of the situation of a number of constituents from BUSM I have worked within the government to secure a lasting settlement. I was not convinced from the start that taxpayers money should be solely used to bail out the collapse of private sector schemes but I had hoped ‘a package’ could be created that returned the lost money. It has taken time to get this exactly right and I am confident we have now gone as far as can be reasonably be expected.”

“As with all campaigns there have been ups and downs. But working behind the scenes to convince Ministers to keep this moving has paid dividends. People will recall I led a delegation to meet the pensions minister James Purnell to hammer home the need for the details to be right.

“That is why I have been bitterly angered by the Tory Party opportunism locally and nationally on this issue. It was always far too complex an issue to be settled quickly and far too important for ignorant remarks and political gesturing. Sadly this is all we got from the local Tory. I sincerely hope Tories and critics locally will now swallow their pride and apologise and now welcome this package. Again it is something we would never see from a Tory government”

Background:

In March, the governments directing actuary Andrew Young was asked to report on the best way to use the assets of failed company pension schemes to make the old scheme more generous.

The Financial Assistance Scheme (FAS) is the official rescue net for people whose pension schemes collapsed between January 1997 and April 2005.

The Pension Protection Fund (PPF) covers members of pension schemes that have gone under since then.

Despite various concessions since it was first designed, the FAS remains significantly less generous than the PPF.

It pays out 80% of a workers "core pension", subject to a cap of £12,000 - due to be raised to £26,000 - and has no inflation proofing.

In contrast, the PPF pays 90% of a more generous pension entitlement, again subject to a £26,000 cap and has some inflation proofing.