Pension victims face small payouts

EXPERTS are warning victims of pension scheme collapses that they are likely to receive much smaller compensation from the government's Financial Assistance Scheme than they might have anticipated.

Unions, victims and their representatives are bracing themselves for an announcement about "who gets what" from the pounds-400 million set aside, after pensions secretary Alan Johnson promised details would be disclosed in February.

However, a picture is emerging of a package which will pay only around half the pension lost to those aged over 50. Those aged between 50 and 40 will receive some compensation on a sliding scale. There is likely to be little left for those under 40.

Ayr MP Sandra Osborne, who spearheads the campaign for Scottish victims, said: "I would be very disappointed if this was all that was available." She has tabled an early day motion calling for more money to be set aside, which has been signed by 149 MPs.

It is thought that the final decisions about precisely how much each victim will get have yet to be taken by the Department of Work and Pensions.

A spokesman told the Sunday Herald that an announcement would be made early this year, which could mean "sometime during the first three months".

Actuary Alan Higham, who has been advising the government, said the DWP is working on a number of different modules which look at the different sums which could be paid to those at different ages.

However, Higham said:

"There isn't enough in the fund and the government knows it isn't enough, so it is anxious not to promise something which can't be delivered.

The unions are unlikely to welcome the offer. Amicus's Bryan Freake said: "We need more money, and we will continue fighting for it.

Higham says this may not be the end of the story. He said:

"My instinct is, if [the government] can do something they will, maybe not now, but this is an area with a lot of legs over the next five years."

Copyright 2005 SMG Sunday Newspapers Ltd.
Provided by ProQuest Information and Learning Company. All rights Reserved.