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How many more appeals until the Government accepts guilt?

Today marked yet another victory for the 125,000 workers who lost their occupational pension schemes as the Court of Appeal found the Government guilty of misleading them.

The Court of Appeal found last year’s High Court judicial review ruling – which resulted in a victory for the workers – was correct and dismissed the DWP’s appeal against it.

The three Court of Appeal judges said the Work and Pension Secretary’s rejection of the Parliamentary Ombudsman’s findings was irrational and unlawful and ruled that he must accept that the DWP caused injustices which go beyond financial losses.

The verdict said the Government not only mislead at least 125,000 people about the safety of their pensions but also said this led to distress, anxiety and uncertainty for the pension victims.

Work and Pensions Secretary James Purnell intends to appeal the decision in the House of Lords.

Pensions campaigner Ros Altmann says: “We warmly welcome this judgment which, yet again, vindicates our arguments and confirms that the Government misled trusting citizens about the security of their pension savings.

“But we are astonished James Purnell, wants to appeal to the House of Lords. It is now 6 – nil against the DWP. How many verdicts will it take to make the Government see sense?”

On the regulation front, Sea Containers has withdrawn its appeal to the Pensions Regulator against a decision to issue two financial support directions on the company.

Sea Containers will now have to provide a form of financial support to two pensions schemes belonging to its subsidiary Sea Containers Services within 30 days.

In June 2007, the Pensions Regulator determinations panel decided to issue two FSDs on the company after parent company Sea Containers went into Chapter 11 administration in 2006.

The regulator ordered Sea Containers, which owns the train company GNER, to inject at least £90m into its pension funds or face court action.

This marks the first time the watchdog has obtained permission to demand cash on behalf of pension trustees from a company that it fears will abandon its retirement liabilities.

In other news, Norwich Union is getting advisers all hot under the collar over the surplus cash in its with-profits funds after it announced it would be distributing £2.3bn in special bonuses.

It may look like good news on the face of it but advisers are angry that Norwich Union will be phasing the payouts over three years and say it is simply a retention strategy.

NU says £2.1bn of special bonuses will be paid over a three-year period to 1.1 million policyholders in the CGNU Life and CULAC with-profits funds – giving policyholders an average payout of £1,900 each – and £230m will be divided among shareholders.

Worldwide Financial Planning IFA Nick McBreen says: “They want to retain the funds. By removing the MVRs last year but in the same breath announcing a reattribution, they made it impossible for customers to leave. This phased special bonus is simply a retention strategy.”

Advisers are also backing Aviva policyholder advocate Clare Spottiswoode who is arguing that policyholders have a right to the remainder of the £5.5bn inherited estate.

Norwich Union says policyholders do not have an automatic right to the remaining £3.2bn left in the fund as they are agreeing to give up rights to any future payouts from the estate by accepting a payout from shareholders under the reattribution process.

Spottiswoode is arguing the majority of the remaining £3.2bn rightfully belongs to policyholders and, under the reattribution process, it should be split, with 90 per cent going to policyholders and 10 per cent to shareholders.

But Aviva says the size of the fund is not relevant to payouts that policyholders may get if a reattribution deal is agreed.

It has made an undisclosed offer to Spottiswoode which she must reply to within a month.


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