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Collapsed scheme compensation case to go to full hearing

UK - Pension campaigners, challenging the government's refusal to compensate members of collapsed occupational pension schemes, have won the right for a full hearing next year, a High Court judge has ruled.

The hearing, to be held on February 7, will follow the judicial review challenge of a group of pension campaigners spearheaded by the Pensions Action Group, who object to the government's rejection in March of a call by the Parliamentary Ombudsman Ann Abrahams to compensate up to 85,000 people who have lost pension fund benefits.

In a report, Abraham concluded that members of defined benefit funds that were wound up with inadequate assets were let down by governments and other public bodies between 1996 and 2004 and accused the government of maladministration for keeping in place the legislation which caused the situation despite several warnings from the actuarial profession.

Abraham recommended that the government should make full restoration of all lost pensions; however, the Department for Work and Pensions (DWP) said it had not made any guarantees concerning occupational pensions.

Mr Justice Collins of the High Court said that a speedy decision is necessary because the claimants are suffering financially.

Commenting on the case, Ian Pittaway, a partner at Sacker & Partners, a law firm specialising in pensions, said: "I would say that it would have to be quite a brave judge that held in favour of the campaigners, because the price tag attached to it is billions of pounds, it is not some ordinary case."

This is a groundbreaking case, in his view, in which the fundamental constitutional issues are raised to what extent government departments should comply with the views of the Parliamentary Ombudsman.

"The judge will be breaking new ground and it's a hard one to call considering the quite profound consequences," he added. "I'm not saying the judge wouldn't hold in their favour, but the consequences as such are so profound that they have to think long and hard about it."

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