UK to legislate on pension protection fund
UK – The UK government has said it will legislate to introduce a new statutory pension protection fund.
Chancellor Gordon Brown told the ruling Labour Party’s annual conference that work and pensions minister Andrew Smith would introduce the legislation.
“So I tell Conference today, Andrew Smith will legislate for a new statutory pension protection fund, in future every worker contributing to a pension will have their pension protected and be guaranteed their pension rights.”
The planned fund has come under fire from all sides, with the chairman of the Association of Consulting Actuaries, Gordon Pollock, saying it would be disincentive for employers to provide defined benefit schemes.
Brown said he welcomed the debate on pension compulsion and told delegates that the fund would end “the injustice of workers who when their company goes bust lose not only their jobs but are cheated of their pensions”.
Brown also said that the new two billion-pound (2.85 billion-euro) pension credit will come into force from Monday. He said the move “the biggest single rise in pension payments” would help pensioners with small savings, small occupational pensions and those “who have lost out for too long” Four million pensioner households would gain an average of eight pounds a week.
Brown pledged a “new policy to tackle two longstanding problems - to remedy the unfairness of small works pensions and to abolish pensioner poverty in this generation”.
Brown gave no timetable for the legislation. Plans to set up a pension protection fund similar to the US Pension Benefit Guarantee Corp., were first put forward in June.
The unions have forced a vote on pension provision at the conference and Smith is set to address the conference on Thursday.