News story

11th July 2002

Pickering Report: Urgent Action Needed to Stop "Haemmorhaging" of Money from Company Pension Schemes

The Liberal Democrats have welcomed proposals in a Government-sponsored report to simplify the running of pension schemes, but say that the Government needs to go much further to tackle the huge pensions savings gap. Responding to the Pickering Report, Steve Webb MP, Liberal Democrat Shadow Work & Pensions Secretary, said:

"Simplifying pension schemes is a desirable step, but the Government will have to go much further if it is to tackle the huge shortfall in pensions saving. We believe that the Government should require all employers to make a minimum level of contribution to their employees' pensions, and should reward employers who go further than this. Otherwise, the haemorrhaging of money from company pension schemes will continue".

But the Liberal Democrats have responded with concern to proposals to water down rules which currently ensure that company pension schemes provide benefits for widows/widowers when scheme members die. Under Pickering's proposals, companies will be able to offer pensions which pay nothing to widows, and which do not rise in line with inflation.

Commenting, Steve Webb MP said:

"Among today's pensioners, elderly widows are by far the poorest. To scrap rules that offer protection for widows is a step in the wrong direction. And with many people expecting to be retired for 20 years or more, having a pension that does not keep pace with prices could condemn new generations of pensioners to poverty".

ENDS