European Commission Petition 1107/2003 Company Pensions in the UK - - PowerPoint PPT Presentation
European Commission Petition 1107/2003 Company Pensions in the UK Appeal to European Commission on behalf of Mr. Maurice Jones and over 100,000 UK citizens 25 th April 2006 Dr. Ros Altmann 1 Why EU being asked to help UK Government ignored
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UK Government ignored EU rules in an attempt to keep
1 in every 100 members has lost some or all pension UK ignoring maladministration verdict of own Ombudsman
Encouraged joining company schemes, no risk warning,
Not allowed other pension, members no chance to protect Like forcing members to bet all retirement income on
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Parliamentary Ombudsman blames UK Government – says
Lost some state pension too as unique UK ‘contracting
Government called them ‘Guaranteed Minimum Pensions’ Before 1997, they were ‘guaranteed’, after 1997 only
Government secretly decided MFR only designed to give
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Government said trust basis (separating assets from
In truth, no proper protection because system depended
EU law requires solvency to be ensured with reasonable
UK state pension so low that private pensions vital Government not been honest about pensions – post
Could not happen in other EU countries – IFI/Richardsons
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UK pension system run for ongoing funding not solvency Legal rules on wind-up force scheme assets to buy
Not private schemes-Government endorsed and interfered Other members have first call on Mr. Jones’ contributions Allowed contribution holidays, solvent wind-up, removed
Assumed equity returns provide adequate pension funding If financial companies encourage investing risky products,
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EU law provides for protection, UK has accepted this, but
Article 1, 1st Protocol Human Rights, 1980 Insolvency Dir. UK Government has refused to accept its responsibility This injustice demands pension replacement not just
Europe cannot allow member state to flout law like this What can be done? Article 226 force UK to remedy failure EU help urgent – biggest social injustice of our time
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The following slides are for more detailed information…
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for 38 years
whole company pension and part of his state pension
the UK Government assured them were safe
Even some pensioners have had their pensions cut
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UK Government told everyone pensions were safe when
Government policy set out to make people believe that
Government told the public they were ‘safe’ ‘protected’
They were not Members were denied an informed choice The law took away their contributions to pay other
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low state pension
costs would rise
Funding Requirement (MFR) and Regulator to reassure public
employer failed – not told MFR only designed for 50/50 chance
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reflect annuity buyout – long-term funding vs. solvency
properly protected – members lose state and private pensions
retirement income
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Protection radically reduced after 1997 Priority order gives all assets to pensioners first All others not protected, irrespective of age, health, years
Anyone who took early retirement gets full pension, while
Not even proper protection for solvent employer schemes Over-rides trustee discretion and scheme rules
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Successive Governments promoted/encouraged joining Inland Revenue prevented any other pension Official documents contrasted ‘safety’ of final salary
Government in charge of MFR, misled members that
Government interfered with private schemes after 1997
Even state rights not protected fully
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share in the stock market – no-one would do that if they knew!
were completely unaware of the risks – no chance to protect
scheme, but deliberately decided not to warn of any risks
pensions unsustainably low – sacrificed member security
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for these injustices
protected by laws, but they weren’t
scheme membership, not mention risks
no risk warning, must compensate for financial losses
pensions in full
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Removed ACT relief in 1997, which undermined MFR
Weakened MFR in 1998 and 2002
Pensions had become 100% secure, intention 50%!
Government worried that MFR encouraged schemes to
Reviews of security failed to address wind-up risks Government ignored warnings about rising annuity
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His company pension is zero from 35 years contributions If he had never put any money into his company scheme he would now be getting £31pw week more every week and would have had use of the money he contributed to company pension he has lost! Stan is now age 66 and still working! Scheme pension should be: £86pw Of which: GMP £48pw Own pension £38pw Scheme paying him just £17pw!
Government deducting £48pw from his State pension because he
was contracted out and should get this from company scheme. But he isn’t.
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Agreed to pay just £400m in 20 years Only about 30 people out of 100,000+ been paid! Interim 60% of pension, losing all inflation-linking Benefits capped at £12,000 Maurice Jones will lose over two-thirds of his pension Also lost £85,500 tax free lump sum and widow’s cover Parliamentary Ombudsman agrees Financial Assistance
Excludes over 80% of those affected
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Other European countries have protected pensions
IFI/Richardsons example – all Eire workers got full
UK Government needs to remedy this injustice What does it take for this scandal to be righted?
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UK Government has not yet accepted its responsibility This demands pension replacement not just assistance Financial firms would have to compensate for losses if
EU law provides for protection, UK has accepted it, but
Europe cannot allow member state to flout law like this What can be done? Your help is urgently needed –
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www.rosaltmann.com