The Liberal Democrats have issued a plea to the Government to establish a brand new compensation scheme for those people who have lost out on their pensions due to company pension schemes being wound up and closed.
Our view
The Government has already proposed a new compensation scheme called the "Pensions Protection Fund" which will be established for 2005. However, this will not compensate those who lose out before then, only those who suffer as a result of schemes that are closed and wound up after 2005.
The call is admirable from the Lib Dems and indeed we believe that people who lose out should have some form of recourse, but as ever, there is no substance to it.
Who will pay for the scheme? The only fair way, is for pension scheme managers and providers who look after the pension monies to allocate a share of the income to a levy.
The problem, as ever, will no doubt be paid for by the pension paying public. It is the Government who introduced strict codes and rules for the solvency of company pension schemes, yet when pensions schemes come unstuck and the spiralling costs force employers into liquidation, the Government is nowhere to be seen!
The previous Tory Government did the same with Personal Pensions in the late 80's, promoting the new pension on TV showing Nurses and others having their own personal pension plan. When it came to a "mis-selling scandal", where was the Government?
Again, we reiterate, great idea but who will pay?