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Pension Corporation hits back at Unite accusations of raids on schemes

Pension Corporation has hit back at comments from Unite after it accused the pension buy-out firm of raiding pension schemes.

Unite said yesterday that it was calling on the Government to legislate to protect pension schemes from “raids by private equity style companies”.

But Pension Corporation says it does not raid pension schemes but provides sponsorship, insurance or asset liability management services to pension schemes.

In a statement released this morning, Pension Corporation says: “In this way, it helps to strengthen pension schemes and stabilise their financial position. Its financial returns will be drawn down only over the long-run in the same manner as an insurance company and only after pension scheme member benefits are secured.”

Unite officials recently met with Pensions Minister Mike O’Brien to discuss the Pension Corporation takeover of the Telent company.

Unite says it believes the Pension Corporation bought the telecom services company for £400m to gain control of its £3bn pension plan and in addition, access to the assets of a further pension account worth £520m.

Unite wants to see changes in the law to stop pension schemes being used as instruments of short term profit making for private investors.

Unite national officer Peter Skyte says: “At our meeting with Pensions Minister Mike O’Brien yesterday, we pressed the government to take quick and decisive action to stop raids on pension schemes by companies seeking to make a fast buck for private investors at the expense of employees and pension scheme members.

“It’s clear that the key attraction for the Pension Corporation that bought the former Marconi company was its £520m pension back-up scheme. Pension schemes belong to the present and former workforce and must be used to protect their long term futures in retirement. They should not be used as a piggy bank to be raided for short term private gain.

“Mike O’Brien listened to our concerns and we welcome his assurance that the government is looking at long term legislation to safeguard pensions from such raids.”

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