The Barbara Panvel Column

DON'T MENTION THE PENSION

18-08-2006

The government's coming under increasing pressure to compensate 125,000 workers who lost money when their final salary pension schemes were wound up. MPs on the Public Accounts committee recently echoed criticisms made by the parliamentary ombudsman Ann Abraham, who said official advice on the subject had been inaccurate and inconsistent. Despite all the brickbats, Work and Pensions Secretary John Hutton is assuming the ostrich position, much to the annoyance of Barbara Panvel…

One writer has said that occupational pension schemes had been exposed as “a shameful confidence trick” – and when you consider that thousands of workers lost thousands of pounds when their company pension schemes collapsed it's hard to disagree.

It doesn't have to be this way though – Europe has a pension protection law to make sure this kind of thing doesn't happen.

But guess which EU country stands alone in failing to adapt it? That's right, Britain. How did you guess?

It will be interesting to hear the Government's explanation for its failure to safeguard company pensions when it's eventually hauled before the European Court of Justice.

When companies dipped into their employee's funds, it's not as though the cash was spent on anything useful.

Only a small proportion went towards productive investment in plant and equipment - the rest was squandered on the global financial markets with speculation in currencies, derivatives, futures and hedge funds, takeovers and privatisations – gambling, in other words, with people's jobs, pensions, incomes and savings.

Small wonder that young people are becoming increasingly reluctant to put money by for their future.

Yet this generation may well have greater need of pensions as our life expectancy grows.

One option is to press for a better state provision in old age, but how about this for an alternative – a People's Pension.

The rules would be drawn up by MP's, economists and accountants and it would allow savers to invest in building schools, hospitals, care homes, transport and energy systems.

Workers' cash would thus be put to good public use, and they would have a guaranteed return in later years..

More pressure is needed to ensure that MPs - elected to serve the people - should give their constituents the same security as they themselves enjoy, comfortably cushioned as they are by self-awarded, guaranteed & substantial pensions.