This week, the government agreed to bring forward plans to review the current rules concerning the priority of pensioners when a company fails following pressure from the Liberal Democrats.
Responding to calls from Stephen Lloyd, our Spokesperson for the Department for Work & Pensions, new DWP Secretary of State Esther McVey agreed that a review into the current rules – past and current – after companies go bust is “something that needs to be brought forward”.
Stephen said:
Under current rules, pension obligations are unsecured – meaning that insolvent companies only fund their pension schemes once they have compensated their other supposedly more ‘important’ secured creditors.
Today I urged the new Secretary of State to review the rules and provide further protection for employees with private pensions by giving them greater priority when companies fail. I was delighted to hear the Minister agree that this is something ‘which needs to be brought forward’.
Then and only then will employees with private pensions be wholly protected when large companies collapse. I will be making sure that the Minister sticks to her word on this.
You can watch Stephen’s question here.
Now, warm words in the Commons Chamber doesn’t necessarily translate into action from the Government, but you can bet your life that Stephen will be pursuing this.
We probably all know somebody whose pension has been affected when a company fails. When people have been paying into a scheme for their working lives, they deserve to see the fruits of that investment.
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4 Comments
Agreeing ‘to review’ is not agreeing’ to take action’.
Pensions are just wages deferred. They belong to workers, not bosses. Those who take them, use them for other purposes or fail to fully fund them are guilty of theft.
Responsibility for ensuring company schemes have enough money in them should lie with all company directors, who in some recent cases are little more than common criminals.
The thought of swapping their Savile Row suits for prison garb would make non-executive directors actually do their jobs. Big fines they would recover from the firms are no deterrent.
If a pension fund falls below, say,10 per cent of the minimum assessment required by qualified professionals, its directors or trustees should face the threat be sent straight to jail, and not pass Go to collect huge redundo payments.
The sight of a few top City stars in clink would help ensure pension funds are kept funded.
Let
¨The sight of a few top City stars in clink would help ensure pension funds are kept funded.¨
Or perhaps the sight of a few of them, having been stripped of all their assets, spending the rest of their working lives on the minimum wage cleaning fatbergs out of sewers… sewer rat seems an appropriate description for these people…
Jonathan Hunt’s analysis of the pension problem is correct. The implication is that the directors and others with major control of companies need to have, legally, a wider remit than merely to make money for the shareholders; pensions provision and environmental impact are two of the obvious candidates.