The Government says its decision to change the priority order on pension wind-ups will help to ensure that pension savers do not lose all their entitlements if their scheme goes bust.
Under pressure from backbenchers calling for compensation for 60,000 wind-up victims, the Government has said it will bring in laws to ensure that pension scheme assets are spread more fairly.
Existing rules can leave members of wound up schemes still of working age with very little while those who have already retired get their pension guaranteed in full.
Under the new rules, there will be less protection for pensions but non-pensioners will be given priority over the future year-on-year inflation increases to pensions.
Alexander Forbes Financial Services director Nigel Chambers says: “The losers will remain workers close to retirement who could still find their pension decimated in the weeks before retirement. It is simply not possible to shuffle an insufficient amount of money to satisfy the needs of every member of a bust scheme.”