The amendments called for payout levels for those in schemes that went bust before the Pension Protection Fund was formed to be raised to PPF levels.
This would be funded initially through Treasury loans and in the long term through unclaimed pension assets.
The ABI has warned that any such move on unclaimed pension assets would constitute another raid on pensions.
The amendments would have also ensured victims received payouts straight away rather than under the current arrangements where victims have experienced large delays in receiving payouts and around 8,000 who should have received payouts have not.
In Parliament yesterday, pensions minister James Purnell offered further concessions to quell backbench discontent, although 15 Labour backbenchers still voted for the amendments.
Purnell set out plans to increase the scope of the Financial Assistance Scheme further to benefit an additional 8,000 people, on top of the extra measures announced in the Budget.
This will help members of schemes that began winding up between 1 January 1997 and 5 April 2005 when a compromise agreement is in place and when enforcing the debt against the employer would have forced the employer into insolvency.
Purnell said the Government plans to conduct a review led by industry experts into ways of topping up the benefits available from the FAS, in particular looking into pooling assets.
Purnell said: “We are setting up a review to examine what more can be done and to consider the Opposition’s suggestions and all the points made in the debate.
It would be wrong to give people false hope, but I am afraid that the Tory amendments would create exactly that risk. They have unraveled even during the debate. It would be better for the House to wait for the review than to accept the amendments”.
But Opposition parties say these concessions do not go far enough and they will continue their fight when the Bill reaches the Lords.
LibDem Shadow Work and Pensions Secretary David Laws says: “Why, for goodness sake, do the Minister and the Government not do what now seems inevitable?
Why do they not deliver for the pensioners – many, as we have heard, in a very vulnerable position – who are waiting for the compensation that is due to them?
Having initially been told by the Government that no compensation was possible, over the past three years they have witnessed the tortuous process of the Government’s conceding more and more without bringing the matter to a conclusion”.