Campaigners for the 125,000 people who lost workplace pensions are cautiously optimistic of victory in their three-year struggle with the government, after last night securing cross-party support for an amendment to the Pensions Bill.
The amendment, tabled late yesterday with support from Conservative leader David Cameron and his shadow chancellor George Osborne, LibDem leader Sir Menzies Campbell, and several Labour MPs, would force the government to set up a new "lifeboat fund" with interest-free loans, to be repaid in the future from the financial sector's stock of unclaimed assets.
The fund would make up any shortfalls in pension funds whose sponsoring companies went bust before April 2005 and so are currently eligible for the much-criticised Financial Assistance Scheme.
The FAS, which has paid out only a few million pounds to 900 people despite 10,000 being already eligible, would be merged into the Pension Protection Fund for administration. Trustees would use surviving assets to pay out pensions, rather than (as at present under the FAS) having to purchase annuities at full buy-out cost.
Crucially, all victims would receive PPF level benefits, rather than the meaner level offered under the FAS. Members of schemes cynically wound up with large deficits, but meeting historic regulations, by solvent employers, would also be covered for the first time.
The dramatic cross-party support arrived on the eve of today's opposition day debate, in which the Conservatives will propose a vote of no confidence in the chancellor of the exchequer's handling of occupational pensions since 1997.
The amendment will be voted on tomorrow, and if it attracts full opposition support could need the help of barely 30 Labour MPs to defeat the government.
The government conceded the FAS under political pressure three years ago, and has twice topped it up, most recently promising those affected around two-thirds of the real value of their expected pensions, compared with the 80% offered by the PPF.
Campaigners point to government figures showing the real cost of upgrading all 125,000 victims to PPF level Continued from Page 28 benefits would be £400m, less than the £725m overpayment of benefits last year by the Department for Work and Pensions.
Ros Altmann, adviser to the Pensions Action Group, said last night: "So far, the government has denied any responsibility for the plight of these pension scheme members, even after unequivocal verdicts by the Parliamentary Ombudsman, Public Administration Select Committee, European Court of Justice and High Court Judicial Review.
"This is a truly cross-party initiative which will demonstrate to the government that the will of Parliament is to ensure justice is achieved for those who listened to official guidance which told them to save in their employers' pension schemes and that their money would be properly protected by law if their scheme wound up."
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