Indictment or unsustainable leap of logic?

A fascinating report into Government culpability over the collapse of a series of occupational pension schemes was published today.

The report, written by Ann Abraham, the Parliamentary Ombudsman, accuses the Government of producing “inaccurate, incomplete, and inconsistent” advice about occupational pension schemes. It also criticises ministers for weakening the regulation of company pensions and says the Government should pay up to £15 billion in compensation to 85,000 savers who lost their pensions when their schemes collapsed.

But the Government has dismissed the report saying it never made any claim that taxpayers would guarantee occupational schemes. Stephen Timms, the Pensions Minister, says it is “a huge and unsustainable leap of logic” to assert that the taxpayer should make good all such losses.

So is the Government to blame as Ms Abraham claims? Or is it unreasonable to expect taxpayers to foot the bill for company schemes that go bust? Post your comments below.

Pensions minister replies to your comments

Comments

[Barry Faith]

Government officials must be held accountable for their actions, just as business managers are. If a company director can be prosecuted for criminal negligence, then so should government officials. If they lie or deceive then they should be held liable. How dare government officials keep back vital information that individuals could use to determine the safety of their assets! How dare they live in the cossetted world of gold plated state pensions and then lie or deceive those who must rely on thier own resources to provide for their retirement! How dare the Chancellor castrate private pensions when he has a gold plated one himself! What a bunch of hypocritical and bigoted oafs they are! Shame on them!

[Brian Taylor]

Why should the tax payer be expected to contribute to failed company schemes and not to other pension schemes i.e. the members of Equitable Life? Who also lost out!

I find it incredibly annoying to be asked to stump up (thro' increased taxes, council tax, etc) for local authorities staff pension schemes, civil servants, etc, but then find it hard to find the funds for my pension scheme.

I understand the severe personal problems that pension schemes are having - and through this the dreadful plight of pensioneers who suddenly have no pension provision - despite years of paying in, but why should the tax payer be expected to bale these schemes out?

[Paul Tranmer]

Final salary scheme "guaranteed" pensions are only as good as the ability of the employer to fund that so-called "guarantee". The government via the PIA and FSA issued warnings to the public that personal pensions should not be taken out if a final salary shceme was available.Millions of people took this advice. Tens of thousands were awarded "compensation" if they had been advised to arrange a pers.pen. in lieu of the F/S membership. The question is now " what happens to the wretched member of an F/S scheme who was reinstated as a member when he had arranged his own plan. If the F/S scheme now goes under who compensates him? Who compensates the hapless insurance co's and financial advisers who have stumped up millions in redress payments? There really is only one answer to this and it is up to the Government.They set the chain of events in motion...they are the cause!

[Liz Kwantes]

I find the whole of the government's response to the Parliamentary Ombudsman's report extremely worrying to democracy in this country. This is not the first time that the government has decided they don't agree with the PO and so will just ignore it. If I say that I don't agree with a speeding fine I would not be allowed to just ignore it, I would have to prove that it was wrong. If the financial services industry told us shares could go up and omitted to say that they could also go down, the FSA would leap on them. Why is it that none of this applies to the current government?

[Kevin Mark Robinson]

Of course the ombudsman is correct.

Successive Goverments have been at fault but NEVER was anything published advising that company pensions were anything but safe.
And if they were not safe WHY did the government reduce the MFR twice?

To make them less safe?

And why were people not warned when they did so?

Finally - why have an ombudsman if you do not accept the findings she makes?

Probably we can expect the labour dictatorship will be trying to get rid of the ombudsman because she does not agree with it?

What chance of another crony?

Watch this space!

[Derek Sinclair]

I don't believe any information any government puts out and I am sure that many of the pensioners would have said the same. Now that they have lost money they want a government they have never believed on any other issue to stump up using taxpayers money. Forget it. Governments exist to lie and ignore the wishes of the electorate. They do not ride to the rescue when one's personal circumstances go pear-shaped.

[Richard]

Yes the gov.should pay-up for these people,after-all,the tax payer pays the public sector pensions look what's happening to the Post Office pension fund we all pay that through stamp purchase!!

[Tim Knight]

Perhaps Government communications should now carry the qualifier "The honesty of this document can go down as well as up. Past performance may assist in your assessment of future trends".

[Harry Robinson]

The only Guaranteed Final Salary scheme is the one for MPs. It is believed to be the best scheme in the Uk as it boasts a 2/3 final salary after just 20 years service. It is Non contributary and because Mps can vote themselves vast pay increases this also has the effect of increasing their own pensions by massive amounts.

An average MP just has to serve for 5 years, with an average salary of £60K to retire on £15000 per annum. indexed for life! This is the sort of pension that ordinary working class people who have paid in to their own schemes for 40 years can only dream about!

Of course the government always says it can not become involved in private pension schemes but over the past 20 tears it has meddled with the system to such a degree that NO one is prepared to give any credence to any pension scheme at all.

Add to that the previous comments that WE, the public must subsidise all of the public sector by bolstering their pensions, to the detriment of our own and the last nail goes into the pension coffin.

So its 'I'm alright Jack' as far as the minister is concerned and b......ks to the rest of you!

[Brian Gilbert]

Of course the private sector pensioners should have their pensions guarantee honoured by the government. If not then the 6 million public sector pensioners whose pension fund has been milked of £1 Trillion had better start worrying.

While admitting there is no public sector fund the government refuses to follow normal accounting practice and include it in its accounts as a liability (National Debt) so the public sector pensioners should listen carefully to the Budget next week.

If it is not in the National Debt I advise a change of Chancellor and a change to an employer who pays cash instead of a notional pension contribution.

[John Hubbard]

I am one of those affected, having lost pension entitlement of nearly £20k pa. I did all the right, boring things when younger - forwent current consumption to contribute to a safe and secure pension scheme for my old age so I would not have to rely on handouts. I have worked non-stop since 1972, and continue to do so, paid all my taxes and dues - but in the expectation that I would be helped if I fell on hard times. The reality is that like so many middle-income earners, it seems my role in life is to contribute rather than receive - because the middle earners are easy revenue targets. We have little opportunity to set up complex mortgage schemes to avoid tax. When I repay my mortgage, I'm pretty sure I will have to find the money myself as there is little prospect of a foreign businessman gifting me the cash. When 'middle-England' needs help, we are ignored, probably because we are so compliant. So, I have learned my lesson - what money I earn now [ie what's left after Gordon has had a good rummage] will be spent on myself and my family. I will not waste money chasing long-term, futile, promises, especially if encouraged to do so by Government - they have no credibility left for me. They are very good at looking after their own fabulous pensions, the provision of which apparently requires no 'huge and unsustainable leap of logic' at all. They are now clearly as morally bankrupt and even more shameless than the last Tory administration which they so loudly derided.

Bitterly,

[Dick Fong]

It never ceases to amaze me how most of the correspondents in this weblog still so happily and glibly say that the government should pay compensation. As a few have pointed out, when the 'government pays out', it is tax-payers who are actually paying out! But, it's not the tax-payer who is being accused of incompetence. Perhaps, it could come out of the generous pay awards and pensions that MPs have given themselves?!

[monkeypuzzleman]

Yet again joe public is up the creek without a paddle but what do MPs care? they have cast iron pensions paid for by the real mugs.Us THE TAXPAYERS. The sooner this goverment is flushed down the pan the better

[trevor thomas]

Again, this Government has one rule for themselves and another for ordinary hard working tax payers.
They have made a total mess of the pensions regime, have driven Employer's away from providing a final salary benefit, because of red tape and we are all reliant on money purchase schemes now, apart from public sector workers, judges, bigger plc's, and of course MPs.
Gordon Brown has a lot to answer for, with his plundering of pension funds.
It get's more like 'Animal Farm' every week

[Sally Isaac]

Gordon Browns decision to tax pension funds was the start of the collapse of those funds.Together with all the huge golden hellos and good byes to failed directors.These people should be taxed very heavily on those lump sums and that money should be used to compensate those poor people who have been robbed of all their hard earned pension contributions.

After all Members of Parliament awarded themselves a23% pay rise and a50% ring fenced pension rise all paid out of my taxes. Also the Government borrows the teachers pension funds back at parr(not the going bank rate)using it for God knows what. BUT this means that whenever teachers get a rise the Government get most of it back at a cut rate!!

[Tony Croton]

I am also one of those affected and once again I am being told by government, that I should save more to provide for my retirement.

What? In another safe, protected by law, guaranteed pension fund. No thanks.

Why should I be compensated by the taxpayer?

Firstly I would like point out that I and most of my fellow 85000 victims are, despite losing our jobs and our pensions, still taxpayers. We are not asking for charity, we are only asking for our rightful deferred earnings, which the government was supposed to protect by use of the MFR.

Secondly, as taxpayers, have we not all benefited from Gordon Brown's £15 billion per annum raid on pension fund dividends? A major contributory factor to current pension fund deficits.

Thirdly, I was told over and over that my pension was protected by law, and that it was the right thing to do to provide for my families future. The alternative was to squander my earnings and rely on the taxpayer to susidise us in our old age.

We did not squander what we had, we provided for ourselves but we were badly mislead and ultimately badly let down.

I will not make the same mistake again.

The government may well have washed its hands of us, but believe me Mr Blair we are far from finished with you.

[Richard Bates]

I was a trustee and kept the books for a substantial (£100m)occupational pension scheme for many years. Today I am a beneficiary of that scheme and fortunately retired around the time when Gordon Brown began to attack such schemes. I use the word attack because in the late '90's he began to siphon off millions from the schemes by preventing them from recovering the tax deducted at source from their incomes. At the time he wrongly believed that this was a fine thing to do because many of them were 'excessively' funded. He completely failed to understand that the 'excesses' were only a temporary phenomenum due to the peculiar strength of the stock market at the time. Stock markets never stay 'high' or continue to rise ad infinitum as any professional investor will tell you. Due to one of the defects in Gordon Brown's financial education, he never realised this. However, what is even worse is that he has continued to deprive the schemes of this tax rebate even though it is patently obvious that he really should back off. This allows one to observe another dysfunction of Mr Brown - his stubborness in the face of obvious truth - God help us if he ever gets to be Prime Minister. Another observation which I would offer which does not seem to have entered many minds is the double-taxation effect of Mr Brown's ill-advised policy: The pension scheme income is taxed in the hands of the trustees (above) and then again in the hands of the pensioner as the pension is of course taxable income. My final comment is to remind all from my long experience that several Governments have messed around with pensions over the last 30/40 years and all have proved to be largely incompetent. This is no great surprise to me - they are politicians not pension professionals and thus know very little about the business. This government has proved to be the absolute worse case in my opinion;- not only have they deliberately reduced the income of pension schemes but they have also had their heads in the sand for the past 8 years concerning a serious national financial crisis which will ultimately affect millions.

[Barry Buxton]

Hard working private sector employees have been robbed of their pensions by Gordon Brown and successive goverments.People who have suffered could well become suicidal and would most certainly have lost quality of life.Government departments were responsible for watching over pensions and providing information to the public which did not happen.Every person in this country should expect to carry a responsibility toward the people who have lost their pensions.Any Government which fails to recognise this is not worthy of power.

[jonathan Etheridge-Julyan]

As usual this government listen to what they want to hear and ignore what they dont...and pensions are no different!
At 37 years old ,I know I need not worry too much about my pension.. because by 65,I will either have drowned in the rising sea levels from global warming,died of thirst because the goverment forgot to sort out enough water for us all, or will have frozen to death because the government forgot to sort out enough gas for us all...!

[Kenneth Grant]

No government in this country has ever funded state or public sector pensions, merely paying out from income, i.e. taxes. This alone shows a complete ignorance of the subject. Pension funds would not be in disarray if it were not for the meddling of Gordon Brown and others. They seem to conveniently ignore the fact that investment should be for the long term and should resist grabbing "surpluses" from funds when the stock market is riding high. It did not take a genius to work out that the market would surely fall and that is precisely when the surplus would be needed to pay out pensions in the lean years. Yes, of course government is to blame. But hey, don't worry we will increase the price of stamps so that postal workers will be OK. The rest of us will just have to lump it. From one who so far has thankfully not been affected but fully appreciates the position of those who have.

[mr j garmston]

As of august 2006 having paid into a final salary pension scheme for the last 26yrs i am told that it will close to all contributing members
even though it is part of our contract of employment and yet what do our brave mps do to stop this from happening (nothing) they wallow in a sea of gravy knowing that there pensions are untouchable. blair & his cronies
should be ashamed they are supposed to be running this country for the good of the people not for the good of themselves

[Mike Godfrey]

First Gordon Brown stole from private pension funds exacerbating a stock market problem and making a crisis, and now New Labour washes its hands over false information issued by Ministers through the DWP. Going on their track record, is there anything left that Labour can be trusted on not to lie over !

[Andrew]

The Government should compensate the affect private sector members who have suffered a loss of their pension entitlement when their company has failed to honour its obligations. After all the public sector pension arrangements are, as we are all aware, being supported with higher taxes. Until the private and public sectors are treated in the same manner it is totally wrong to penalise the country's wealth generaters less equally than those in the public sector.

[Janine Wilson]

Where were the pension trustees? Who remembers pension funds taking holidays in the 1980s? What about the so-called investment experts - that's right the same ones that managed our endowments so well. What about the so-called pension trade union th National Association of Pension Funds. Sounds like all round incompetence to me. The private sector got itself in this mess, the private sector should work its way out - otherwise why not nationalise pensions?

[Paul Burnell]

What a surprise, once again the Government has done nothing wrong!.They should be responsible personally for this and be sued just like the homes for votes scandle. But who can sue the government ? The unions are not capable, dear Tony will not elevate them to the Lords if they cause too much trouble. If this had been a private company guilty of misleading advise Tony would be on his high horse demanding compensation for the pooor ordinary working man who had been decieved.

[eddie reader]

The above postings contain some worthy observations. I feel there is a a larger one - caveat elector.
Napoleon called politicians 'dream-makers'. The 'dreams' have to be made for someone and that someone is the electorate. There are a few, and they are a very few, occasions where the electorate have a profound influence. 1945 where an aspirational expression for the future of Britain was made. 1979 where a statement of how British management and workers had better wake up and smell the coffee - it's a hard world. At some point in the future an election will clean out the public sector. But the idea that a government is elected to 'manage' the UK is largely false. They may tinker well but mostly tinker bad since they are not doers they are talkers. Other than in the case of dire national emergency (war) their tinkering is largely irrelevant to most of the people most of the time.
As a result, the best policy for individuals is to arm themselves with the necessary knowledge and attitude that if they don't look after themselves no one else will. The Welfare State could exist in the basic 40s, 50s and 60s but in the life choices of the new millenium you stand alone.

[Paul Cook]

Why should the government pay up for shortfalls in private company pension schemes. It is a ridiculous suggestion and the government are right to refuse any payments. The main problem is that most members of final salary schemes do not bother to find out how the principle of the scheme actually works. They regard it as being similar to a savings account and cannot understand where their money has gone. You rely on the contributions of new members to fund new pensions. The fund has to be audited every 3 years to ensure there is minimum amount in the fund, it is up to the company to determine how much additional funding is made above this amount. A company that is not in a strong trading position will only pay the minimum which is fine until the company stop trading when the fund is divided up. Until you retire and take your pension you are only entitled to the paid up transfer value.
Anyone in a final salary scheme should always look at the reports on the fund to see what is happening in the scheme. The other thing that members fail to realise is that the fall in the stock market over the last few years caused problems with all pension schemes. This has caused a reduced value of the fund the same as the rest of us with Personal Pensions. We have seen our pensions reduced by up to 60% or more over the last few years due to stckmarket falls and reduced annuity rates. Can we all claim that the government should make up the difference.
Unless there has been any mismanagement or fraud by the company with these final salary schemes then the members will receive pensions based on their share of the funds available which is correct and how it should be. I saw someone on the TV news saying that his final salary pension had reduced by 50%, I think he should be pleased with a 50% pension in the current pension climate. A pension is an investment and no investment is completely safe. Nobody is to blame, pension fund members need to take more responsibility for their pension. Any members in final salary schemes which are under funded and where the company is not doing well should consider taking their pension early or transfering it to a Paid Up or Personal Pension. Pensions are so important and most people take so little interest. Absolutely NO to any money coming from the goverment to support these underfunded private company pension schemes, they are not entitles to it.

[Paul C]

Compensation will cost £120 million a year. That is under £3 per British person per year. While justice should have no cost restriction, this is hardly going to bankrupt the country or over-burden us all.

I say compensation should be paid and in full!

[Desmond Allen]

A basic rule of investment is to spread your risk. Yet, for decades, successive governments have encouraged membership of occupational pension schemes where there was no spread to the risk of bad management. At the same time, the government rules allowed companies to attract recruits by including a pension in the pay package but to freeze company contributions with little or no excuse.

Some companies are still freezing their contributions under rules that do not bear any commonsense scrutiny and many schemes are still heading for disaster. Even worse, management profit sharing will often benefit from frozen contributions and this is tantamount to fraud.

There is very little we can now do by ascribing blame for the pensions fiasco but the government should at least stop all contribution holidays, and they should do it now.

[Richard Bates]

I would just like to comment to Mr Paul Cook that he needs to realise that the man on the Clapham omnibus is in no position to understand or appreciate much of his commentary because said individual does not have the knowledge, skill or ability to do so. Therfore it is completely unfair to expect them to 'take responsibilty for their pensions' just as it would be unfair to ask an old lady to 'take responsibilty for her central heating system'. Having said that, I personally do not expect the government to make up 'shortfalls'. What I do expect them to do is to give back some of the tax they have taken from pension schemes for the past 8 years and then proceed to appoint a panel of experienced and professional men to sort the whole dam mess out for the future.

[Evan Owen]

Who is to blame? This is rather obvious.

The trustees are to blame, whether they were the directors and officers of the company or employee representatives (invariably union officials) it was the trustees who are at fault.

If the trustees had told the employees that there were problems ahead when they needed to put £30 million in the pot but the Government rules said they could only put £2 million in.

The trustees knew there were problems so they gave the employees the impression that the leaflet from the Government was confirmation that their OPS benefits were in some way guaranteed when the entire financial services indutry knew otherwise. The trustees found a scapegoat, a gift from the idiots running the country into the ground.

As a taxpayer I resent the idea that I must pay for the 'errors' of others.

Sue the trustees!!

[James Carfrae]

The directors of companies who sponser final salary occupational pension schemes are usually knowledgeable enough to know that the scheme is in trouble. They will be kept informed by scheme actuaries, and trustees of upcoming problems.

The actions (or inactions) of directors of companies who sponser final salary occupational pension schemes are largely the cause of scheme deficits.

The directors of these public companies are allowed to behave in this way by the governance and regulator (and the government).

One section of a population are the victims of this incompetance, and negligence. In order for compensation to be payable the people who make the rules, enforce the rules, and break the rules have to admit that they are incompetant and negligent.

In history, this rarely happens, and so political assassins are created from the victims of an incompetant and negligent governance. It is just a matter of time before an impoverished pensioner strikes the first blow at the guilty parties.

One can blame one government in power, and one can also blame a previous government. In both cases neither will blame each other and both cover up each others negligence and incompetance.

Finger pointing and blaming will not solve the victims problems. Those currently in government are responsible for ensuring the victims are treated fairly within the population as a whole. How they deal with this responsibility will determine how they are judged in history.

Taxpayers money is one way of helping. Raiding the pension schemes of competant companies is another way. Punishing the guilty directors and government employees by taking some of their pensions and paying it to the victims is another.

A combination of the above, in conjunction with effective legislation (which is enforced and not changed whenever a crisis occurs), might be the best solution.

[Paula Atwood]

These are not the only pensioners who have been horribly let down by greedy MPs who are lining their own pockets with our tax monies. Many, many UK pensioners have retired abroad and have had their pensions frozen. A large number of these served their country faithfully in the War and for many years after. I have an aunt in Capetown who receives a pension of £3 a week from the UK, after her husband served in the RAF and then worked until retirement age. I'd like to see Blair and his cronies survive if they were treated like this.

[Bryn]

With regard to the recent collapse of Pension Funds I would be grateful for clarification on the one financial issue that I still do not fully comprehend.

When ASW went into liquidation its liabilities were (correctly) secured against the assets of the firm. However, it is my understanding that the Company Pension Fund was classed as an asset of the firm and that this was subsequently used to pay off the creditors. Is this correct?

If correct, how can the savings of the workers be classed as an asset of the firm? Surely this money belongs to the workers who have merely placed their savings under the control of expert Trustees to be invested on their behalf for the future?

If this is the case, then why wasn't the Pension Fund regarded as another company liability with the genuine creditors (the workers) having first claim?

Please enlighten me!

[Ronald Phillips]

Mr Brown is responsible for the pensions crises as he raided the pension schemes of billions of pounds of tax revenue. This was mainly done in order to keep labour promises of not raising income tax. The government should now pay back the stolen money by way of compensation to all the people who have lost their pension plans. They should also bring in robust legislation to protect all pension plans, not allowing contribution holidays and not allowing companies to dip into pension funds..

[Phillip Cox]

It is harsh on any members of final salary schemes to suffer the losses that some have. Governments have a lot to answer for as they in effect forced companies to take contribution holidays by insisting that schemes did not become heavily overfunded.
Members of schemes should not have to look into the ins and outs of schemes. They pass over money in good faith to trustees who are responsible for providing the assurance of benefits. Ordinary folk cannot be expected to understand the complexities of FS schemes or the funding arrangements. They expect to receive some form of protection and in fact were led to believe that this is what they were getting. The pensions industry, investment houses and governments have a lot to answer for. I feel real sorrow for the pensioneers who deserve to receive the benefits they both worked for and paid for. As a tax payer I would be happy if the Government diverted some of my tax to this cause. Prehaps some of the money paid by me towards public pensions especially MPs who apparently believe they deserve an increased pension over a short term because of the uncertainty of their employment. Well welcome to the real world!

[Lyn]

This is ongoing.As someone coming out of an occupational pension scheme and a trustee, over the past months I have been trying to ascertain the security of Self Invested Personal Pension (SIPPs) or Personal Pension (PPs). There is conflicting (reticent) information from The Financial Compensation Scheme(FSCS)as to how funds transferred into A SIPPs are regulated. Apparently they are not. This conflicts with most SIPPs Providers information. Once funds are transferred it is upto the strength and longevity and honesty of that company (they are the signatories as administrators). It is appalling that DWP nor The Revenue are able to give advise,
indeed they did not know what a SIPPs was! Why are they not FSA and/or FSCS regulated? A disaster in the making.
All pensions deserve regulation and securitycover,otherwise no point in calling them pensions.

[Lynne]

As someone coming out of an occupational pension scheme and a trustee, over the past months I have been trying to ascertain the security of Self Invested Personal Pension (SIPPs) or Personal Pension (PPs). There is conflicting (reticent) information from The Financial Compensation Scheme(FSCS)as to how funds transferred into A SIPPs are regulated. Apparently they are not. This conflicts with most SIPPs Providers information. Once funds are transferred it is upto the strength and longevity and honesty of that company (they are the signatories as administrators). It is appalling that DWP nor The Revenue are able to give advise,
indeed they did not know what a SIPPs was! Why are they not FSA and/or FSCS regulated? A disaster in the making.
All pensions deserve regulation and securitycover,otherwise no point in calling them pensions.

[SC]

In order to cut through the many fuzzy ideas surrounding the current pension issues I offer one basic , simple notion.

Like a poorly managed business UK plc and it's workforce have over a period of many years consistently overpaid themselves and proceeded to overspend the proceeds on consumables that return little or nothing for the long term.

Now we will need to get accustomed to the bleating that will greet us daily as we face up to the inevitable rebalancing of our prior largesse on satisfying whims whilst ignoring future needs. It hurts and it should for without the pain there will be no motivation to change what is in danger of becoming a culteral trait for personal irresponsibilty.

In the bleating we will and indeed are seeing attempts at the apportionment of blame and responsibility and yet each and everyone of us as individuals have the capabililty to be both accountable and responsible for our lifestyles.

You really don't change bad habits without accepting responsibility for without that no lessons are internalised and learned in a way which shapes future behavior.

Above all else let's hope that lesson is now being learned !

[Kim Lee]

Incandescent is the most appropriate way to describe the way I feel about the Government's wilful dismissal of the conclusions of the Parliamentary Ombudsman's report.

The loss felt by those nearing the end of their working lives, when they no longer have the means to make up that loss, must be appalling. My own pension, paid for out of income, are invested so my risk is that of inadequate investment performance, not the incompetence of insurance companies, Government or civil servants. I cannot see a fair way out of this mess – the Government has no money of its own, only that which it collects from we taxpayers. Why should we pay? The insurance companies have shareholders or policyholders – why should we pay? The ministers and civil servants responsible for this fiasco have cash plus job security plus a most comfortable financial future – maybe they should pay?

I have been an independent financial adviser since 1980 although I started work for a large insurance company in 1969. Throughout that time I have done my honest best to help people understand this often-opaque business. My job has been made extremely difficult, originally by the fundamental dishonesty of insurance companies and now the Government. For example, insurance companies reassured me that an endowment policy was "a good thing, likely to exceed the target value at maturity by a significant margin." I foolishly believed them and passed on their assurances to my clients. Time has proved them to be wrong, so for their inability to perform the job they were supposed to do, I am left to carry the can. All advised sales - as opposed to direct sales by company employees - are the responsibility of the adviser. Which body states that? The Government-appointed FSA. Maybe I can go to Court, to defend myself? No. Who says? The Government, through the FSA. I am left to stand on my own two feet and pay for "my" mistakes. OK, if that's the way it is to be, why shouldn't Ministers and senior civil servants be held responsible for their actions if those actions lead to loss by individuals? I guess they will say that if this were the case, nobody would want to run the country. I don’t believe that - power is far too great an attraction for that ever to be a problem! They could do what I do, and buy Professional Indemnity insurance. OK, this type of insurance carries an excess on each case that equates to around 12% of my annual earnings. The senior politicians and civil servants responsible for implementing decisions that lead to such losses by individuals probably receive around £250,000 a year when salary plus expenses is taken into account. Their gold-plated pension arrangements will take the actual value of their employment to nearer £500,000, so a 12% excess for each bad decision might encourage them to be more careful.

Our electoral system seems to encourage a decade or so of power before that lot are voted out, only for the next lot to come along and try to change everything while blaming the previous lot for all the mess. If they ARE guilty, sue 'em!

[W Stevens]

I cannot say I have read all of the above in detail but I agree that Government & Insurance Companies have not been as truthful and honest as they should have been with Pensions.

Many of today's and tomorrow's pensioners are spending or have spent more chasing the sun 2/3 times per year or driving the latest registration car that putting money away for "the rainy day" or retirement. In other news today it estimates that 1/2million UK families are in dire straits financially and 2 million have no reserves - admittedly some of these may be young new homebuyers but many might be in their 40's & 50's thinking that life goes on.

Retirement income should not just depend on what the Company Pension pays out but it should also be made up from "other savings".

I was made redundant aged 47 and in the last 13 years I have made contributions to other "defined benefit" & "personal pension funds" PLUS trying to replace savings after putting 3 kids through University.

However all this Savings effort and sacrifice, pales into insignificance compared to what I would have retired on had I done another 13 years service in the Final Salary Scheme of my former employer.

[Jim Glover]

I am one of the 85,000.How does the Government expect my kids to go into a pension scheme when they have seen their parents being robbed blind.

[James]

What's surprising about all of this is that the Parliamentary Ombudsman has made a decision against the government. I had my claim against the DTI rejected by her office after 6 months of me pursuing the claim, with the following comment:- "although your case may have involved maladministration, I do not feel that you have proven that it is one of personal injustice".

The Law actually says that the Ombudsman can decide what is meant as a "personal injustice" and indeed decide whether to investigate a case or not. Unlike a criminal or civil case there is no right to appeal to a higher court.

The Ombudsman has a job for life, and comes from the same Civil Service background as those who you complain to her about.

At the Local Goverment level, see www.lgowatch.org.uk, to see what people think of that organisation

[Ken Wilkinson]

My own personal advice regarding pension 'schemes' is to have nothing to do with them. Insurance is a product sold because of people's fear of the unknown. Paddle your own canoe and dicipline yourself to save and invest. At least you have total control over your money and not dependent on the spurious advice of so called 'financial consultants'. An investment in a selection of stocks in the ftse 100 would give you the same result as a pension scheme. The content of some of the posts here are from people who have been burnt by these schemes.

[Tim Crabb]

The contributions the public sector contribute to their pension fund in no way compares to the contributions made by those in the private sector. To achieve an indexed linked pension at 60 years of age, of even £10,000 per year, an employee in the private sector would need to build a fund of something like £300,000 during their working lifetime. That equates to saving £8,500 per year, or £700 a month for 35 years.
No such fund exists in the public sector, pensions are paid out of direct taxation.
So why should the tax payer, many of whom are on fixed retirement incomes, be forced to top up this fund so that the public sector can enjoy their unreasonably high indexed linked pensions, or even worse why should employees in the private sector be expected to work for at least another 15 years until 70 years of age to pay for these.
The sooner we have parity across the board on pensions the better. There should be a formula into which you input your salary, your length of working life, you pension contributions, this would then determine the fund available out of which pensions are paid. If there is insufficient funds available in any particular tear, then no pension increases would be paid. I have no problem with paying pensions out of taxation provided we all benefit to the same extent.
Unfortunately it's the beneficiaries who are making the rules to the detriment of the poor private sector.
It should be remembered that the public sector does not exist without the private sector, yet we in the private sector are the poor relations.

Tim Crabb - Retired Private sector

[Leonard Chenery]

After serving in ww2 , my wife , infant twin sons and myself left the UK to live in Canada , there were times nostalgia for Britain raised doubts in our minds as to whether we made the right decision . The treatment being handed out to retirees and the pettiness of your government officials with their self-serving attitudes would never be tolerated in Canada , we of course do not have perfection in Government but there is more accountability and consequences to government actions such as your present ministerial meddling in private pension plans . Our decision long ago was the right one , even living in Canada does not put us out of reach of the tentacles of your grabbing parliamentarians , we are so grateful that we do not have to rely on our frozen UK Pension , what we have saved for here has been respected by the Canadian Governments , your government is long overdue for drastic reform .