Pledge to protect pension funds
Workers will be helped by new laws which should stop the “crisis and tragedy” of employee’s losing their pensions when businesses go bust, the Government has said.
Ministers will reportedly establish a new pension protection fund to pay out pensions if companies are put out of business.
The new fund will take over the assets of employee pension schemes when a firm goes to the wall, Sky News reports.
It is reported that existing workers will get 90 per cent of their pension rights, while people who have already retired would get 100 per cent.
The fund will bring in around £300m a year through a levy on existing pension schemes.
Pensions Minister Malcolm Wicks told the BBC that under the existing law employees could face a “real crisis” in their lives when their employers went bust.
He said that the loss of a pension could affect a worker’s health and put a strain on marriages.
“We are as convinced as we can be that we have a fund in place that will end this kind of crisis and tragedy for British workers in the future,” said Mr Wicks.
The minister’s comments come amid fears that current and former workers at Turner & Newell could lose part of their pension following rumours that the motor manufacturer’s parent company will not meet the scheme’s deficit of nearly £900 million.
It is reported that the Pensions Act will also establish a new regulator to ensure schemes are properly financed and that sufficient funds are available to pay out pensions if a firm does go to the wall.
