Press Release welcoming update on Parliamentary Ombudsman investigation

by Dr. Ros Altmann

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The Parliamentary Ombudsman’s office has today written to all members of occupational pension schemes who have complained about the loss of their pensions on scheme wind-up, updating them on the progress of the investigation. The update promises to finish the investigation by early July at the latest, acknowledging the need for urgency, given the extreme distress and hardship which those affected are suffering. If the investigation finds Government maladministration has caused injustice to scheme members, it will recommend appropriate redress to remedy that injustice to Parliament.

The Ombudsman’s general approach to redress is to put people back into the position they would have been in had maladministration not occurred and, where appropriate, to recommend additional compensation to recognise any distress suffered.

This investigation, started in November 2004 and led by Iain Ogilvie, is looking into whether the DWP, HM Treasury, OPRA and the Inland Revenue National Insurance Contributions Office are guilty of maladministration, which has caused injustice to scheme members who have lost their pensions. It is considering:

• The impact of Government decisions to weaken the MFR – the official minimum funding standard for pension schemes – which allowed employers to fund schemes too weakly to meet wind-up liabilities
• Booklets sent to members, trustees and the general public, which failed to mention the risks to pensions on wind-up and assured members that final salary schemes were safe, even after the Government was alerted by the Faculty and Institute of Actuaries to members mistakenly believing their pensions were safe
• Whether unacceptable delays have occurred in reconciling entitlements to ‘Guaranteed Minimum Pensions – GMP’ (which were designed to replace members’ National Insurance pension rights) and agreeing deemed buyback, with Government failing to ensure that these pensions were, in fact, ‘guaranteed’ or ‘minimum’, despite having named them as such!

The Government’s responses to the four complaints, have led the Parliamentary Ombudsman to ask further questions and also to remove ‘a considerable amount of evidence from the files’ of the Departments under investigation. Ros Altmann says ‘I believe that the Parliamentary Ombudsman is the best hope for redress for those who have lost their pensions on scheme wind-up. Government is responsible for what has happened and these people have suffered enough. They should not have to beg and fight any more. The Parliamentary Ombudsman can recommend proper compensation, not just assistance, to remedy this dreadful injustice’.

‘Members of schemes whose employers are still solvent are also included and should know that their suffering is being considered too. Proper compensation could cost the Government over £5billion.’