Saga director-general Ros Altmann is calling on the Government to amend pensions legislation after the Pensions Protection Fund refused to pay compensation to 40 members of a scheme.
Altmann says the G&H pension scheme, which has a £1m deficit on the PPF basis, has made the required annual levy payments to the lifeboat fund. However following the failure of parent company Zejwa, which took over the pension fund in 2002, she claims a problem around the legal definition of the scheme’s “employer” has led to the scheme and its members being rejected for PPF protection.
According to Altmann, the trustees’ application was turned down because in 2002 the scheme was already closed and no members were accruing extra benefits since then. As a result, although the employer responsible for the scheme under trust and tax law is called the “principal employer”, it is not considered under the 2004 Pensions Act as a “sponsoring employer” because it has not actually employed any members since it took responsibility for the scheme.
Altmann says the PPF has offered to repay the levy payments and is “trying to wash its hands” of the situation.
She adds: “We were told that the PPF would ensure members were protected properly in the case of employer insolvency in future. Indeed, members of UK pension schemes have been relying on such protection and they were reassured of this by Government.
“Members of the G&H pension scheme are facing the loss of much of their pension. And there are potentially more, some very large schemes, which could be similarly affected. The assurances of PPF protection have turned out to be false.”
The PPF was unable to comment as its offices are closed.