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'terrifying' Flaw Uncovered In Pension Protection Law

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A good time for firms to go bust if they have a large pension liability?

The Government has been urged to change the law to ensure pensions of all workers are protected if their employer goes bust.

The Pension Protection Fund was set up in 2004 to provide a safety net to people who lost their retirement savings as a result of their employer going bankrupt.

But it has recently emerged that members of the George & Harding pension scheme have been refused entry to the PPF thanks to a flaw in the wording of the 2004 Pensions Act.

The scheme does not have enough money to meet the pensions of workers who have not yet retired, meaning they face losing their retirement savings.

Although the problem currently affects only the 40 members of the George & Harding scheme, pensions expert Ros Altmann warned it could affect many more people in future.

Dr Altmann, who is director general of Saga, said: "I thought we had seen the end of this terrifying threat but now I discover that flaws in the 2004 pensions legislation means the nightmare has returned.

"This is really serious and we are demanding immediate action from the Government. MPs (MPSLTD.BO - news) from all parties must be told that the future for many of their constituents could be in peril unless Parliament acts now."

The problem has been caused by the legal definition of the word employer used in the legislation relating to the PPF. George & Harding was taken over by a firm called Zejwa in 2002, and at the time the pension scheme was already closed.

Zejwa went insolvent in 2009, but despite the fact the group had paid contributions into the scheme and covered the annual PPF levy, which is paid by all firms with a defined benefit pension, because the scheme was already closed in 2002, Zejwa is classed as the principal employer and not the statutory employer.

As a result, the scheme does not qualify for membership of the PPF. The fund has offered to refund the levies paid by Zejwa to the trustees.

Dr Altmann has called for a legislative amendment to be made to ensure that other pension schemes are not excluded from the PPF because of this technicality.

The call is being supported by the PPF, which has also highlighted the problem to the Department for Work & Pensions.

http://uk.finance.yahoo.com/news/-Terrifying-flaw-uncovered-tele-766552981.html?x=0

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Duh, the flaw was completely intentional....

It allows companies to robert maxwell your pension funds....

I mean what do these plebs thing they are paying into something and expecting something back...... fools.

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This issue came up several times during 13 years of Labour government after many workers/retirees were left with sore bottoms. The Labour hypocrites did not change the law properly then and it would be astonishing for the Tories to change it now. No doubt the Guardian/BBC will blame the Tories whenever this comes up..

Edited by mikthe20

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This issue came up several times during 13 years of Labour government after many workers/retirees were left with sore bottoms. The Labour hypocrites did not change the law properly then and it would be astonishing for the Tories to change it now. No doubt the Guardian/BBC will blame the Tories whenever this comes up..

If anyone was in the right place at the right time to change the corupt pension system it was the Tories when R. Maxwell went overboard and the first real pension sham was exposed . They did not do it Libour did not do it and the Tories will not do it this time .

Maybe the truth is the city of London run the country and told them all to f.off !!

Edited by miko

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  • 312 Brexit, House prices and Summer 2020

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