The government lied to people about the safety of their pension schemes but refuses to compensate them. Will you believe their next pension promise? On the basis of the
Parliamentary Ombudsman's report, you'd be wise not to.
Between 1997 and 2004, 85,000 people who were members of company occupational pension schemes that closed down lost some or all of their pension entitlements. Yet the government had passed legislation in the wake of the Maxwell pension fraud in 1995, and set up the Minimum Funding Requirement for occupational pension schemes, telling people it would make pensions safe. It didn't.
Not only that, ministers knew it didn't, yet the Department of Work and Pensions (DWP) continued to put out leaflets that made no mention of any possible risk from companies going bust and encouraged people to add their own money to employer-run pension schemes. They even said occupational pensions were 'guaranteed'.
A private firm would be hit by the full weight of the law
If any private concern had made statements like the DWP's on a savings scheme, the Financial Services Authority would force it to pay compensation. Yet the government now claims the leaflets were only general guidance and that the MFR was never intended to guarantee the safety of pensions - in flat contradiction of what ministers said at the time, and even what the DWP said about its own role and the importance of providing accurate information.
Within weeks, government ministers will be asking us all to believe in new promises they make about the pension reforms they plan to the old age pension, means testing and private saving. They don't realise just how little credibility they have.
The cases cited by the Ombudsman are the toughest I've come across in over 30 years of financial scandals. If, as many victims did, you lost all the annual income on which you expected to live in retirement and had to sell your house and claim state benefits - not to mention suffering illness caused by stress - this is far, far worse than the capital losses suffered by people who were missold endowment policies or lost money in 'precipice bonds'. The victims will continue to campaign for compensation, which I believe they fully deserve. If you want to help them get it, tell your MP.
