NEW PENSION PROTECTION FUND COULD BE A CRUEL DECEPTION - WEBB
12.00.00am BST (GMT +0100) Wed 11th Jun 2003
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Steve Webb MP, Liberal Democrat Shadow Work and Pensions Secretary
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Workers could still find themselves with no employer and no pension should the company they work for go bust, Steve Webb MP, Liberal Democrat Shadow Work and Pensions Secretary, said today.
Steve Webb's comments come in response to today's Government statement which outlined plans for an insurance scheme, funded by employers, which will pay out in the event of an employer pension scheme going under.
Steve Webb MP said:
"The Government's refusal to underwrite the Pension Protection Fund means that the proposals could be little more than a cruel deception for many of today's pensioners and workers."
"The UK's biggest companies have a combined pension deficit of £65 billion which could leave millions of workers vulnerable as a huge claim would wreck the Protection Fund. Workers could still find themselves with no employer and no pension.
"A holiday insurance claim may need to pay out a few hundred pounds; a car insurance claim, a few thousand. A few pension scheme claims would amount to a few billion pounds. No scheme could survive this."
"The cap on protecting pensions against inflation will water down future protection of today's workers' pensions.
"Shallow plans without foundation are not the way to solve the pensions crisis. The Government has to back up insurance guarantees. It is the only way to ensure that people will have confidence in their pension schemes and their retirement."
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