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LibDems want compensation fund for pensions that have already been lost

The Liberal Democrats are calling for the Government to set up a compensation fund for workers who have already lost their pension pots in occupational scheme wind-ups.

At the LibDems&#39 annual conference in Brighton this week, pensions spokesman Steve Webb said he has written a letter to Work & Pensions Secretary Andrew Smith urging the Government to admit its failings and offer compensation.

The Government&#39s proposed Pensions Protection Fund only promises protection for occupational schemes that collapse after its introduction in 2005. The LibDems want to see a fund established for workers already affected, such as at ASW and Dexion.

Research from pension expert Dr Ros Altmann shows the fund would need to provide for an estimated 20,000 workers for 50 years at an annual cost of £56m.

Webb says this could be paid for from an unallocated provision built into the Department of Work & Pensions budget.

Altmann says: “Until now, the Government has had no idea how many people have been affected by the winding up of these company schemes. The compensation fund would be a relatively painless, low-cost way for the Government to deal with the situation.”

Webb said: “This is a moral issue for a Government that told people these schemes were safe. The rug has been pulled from under them and the state has said you are on your own. Compensation would be a first step on the road to restoring confidence in pensions.”

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