ìWe are pleased to note that the Government has listened to the entreaties of pensions action groups and the Pensions Ombudsman and increased the level of compensation offered by the Financial Assistance Scheme. However, we note that assistance is being restricted to 80% of the core pension rights accrued in a scheme. We estimate that for a typical pensioner this might equate to perhaps 60% of their original pension promise given the impact that inflation might have on pensions in payment. Clearly for those further away from retirement the percentage level of true protection will reduce even further.
This will not please everyone who has lost out but we cannot, in all conscience, blame the Government for all losses that have arisen through the failure of defined benefit pension schemes in recent years. Some responsibility must also devolve upon other parties involved such as the actuaries, trustees and employers associated with in the management and governance of such schemes.
Payments by Government to solve investment and financial losses must ultimately be financed by the taxpayer. Protection of this order was not afforded to other needy cases such as those investing in Equitable Life or those with insufficient insurance following natural disasters such as flooding where the effects might not have occurred with appropriate Government defence action. The Governmentís protection role on financial matters cannot, and should not be absolute and thus, belatedly, they have probably got it about rightî
Xafinity Consultingís Pat Wynn - comment on Financial Assistance Scheme Changes in Wednesdays Budget
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