£2.9 billion victory for pension campaigners
Posted on 17 December 2007 by
Pension campaigners are celebrating today, after the government announced a £2.9 billion rescue package.
The money will boost the funds available to workers who lost their pension when their company became insolvent.
Employees whose pension scheme failed through insolvency after April 2005 are covered by the Pension Protection Fund (PPF), which is funded through levies on qualifying schemes. However, members of a scheme that failed before the PPF was established are covered by the Financial Assistance Scheme (FAS), which is part-funded by the government.
Today's announcement by Work and Pensions Secretary Peter Hain will bring the levels of compensation under the FAS, which had previously been lower than those for the PPF, up to the same level.
Some 130,000 people who already qualify for the FAS will benefit. A further 11,000 people who had been excluded because their failed pension scheme belonged to a still-solvent employer will now also be covered.
The announcement, which brings the government's financial contribution to the FAS to £12.5 billion, has been warmly received. Pensions campaigner Peter Jackson said: "This is just brilliant news."
"I will now receive what I was due, which is a huge difference to what I would have received if the government had not acted."
Speaking to BBC News, shadow pensions minister Chris Grayling said: "Well done to my counterpart, Peter Hain, who's clearly won a tough battle in government over the Treasury and over Gordon Brown."
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