An open letter from NAPF chairman Terry Faulkner to Department for Work and Pensions Secretary Alan Johnson blasts the PPF as offering UK workers a false promise of protection.
The letter says that the potential wind-up of the Turner & Newell pension scheme alone – with an estimated buyout deficit of 875m – would dwarf the 400m offered by the Government so far.
The NAPF is calling for unclaimed National Savings of 2.5bn and the 27bn surplus in the National Insurance fund to be used as alternative sources of funding for the PPF. It is warning that an underfunded PPF will undermine pensions rather than bolster them.
Faulkner says: “We must avoid the mistakes of the past – the MFR being a notable example of something which does not deliver what it appears to promise. All that does is to bring the retirement system into further disrepute.”
Independent pension consultant Ros Altmann says: “After years of saying that they did not want to raise false hopes, this is exactly what the Government has done. The 400m is totally inadequate and can only help a few tens of people rather than tens of thousands as intended.”