Sam Dunn: So the Government thinks it can dodge all the blame for company pension disasters ... no one else does

In a move that would have impressed Harry Houdini, the Government has picked its way out of what looked an inescapable bind.

Despite the devastating report last week from Ann Abraham, the Parliamentary Ombudsman, into the Government's role in the failure of final-salary occupational pensions, ministers wriggled out of two weighty chains: compensation claims and responsibility for the mess - (see page 19).

Their escapology was far from elegant - a blunt rejection of Ms Abraham's most damning conclusions that government advice to the public was flawed and that it failed to listen to actuarial warnings about inadequate funding for company schemes.

Stephen Timms, the minister for pensions reform, said the responsibility "must fall on those companies ... and trustees" instead. Government leaflets on the subject were "intended to be simple and introductory" and didn't claim to "offer comprehensive advice", he added.

Shock and anger greeted this attempt to walk away from blame. Agitated MPs, many of whose constituencies contain companies whose schemes failed, now hope to force the Government to review its decision and shoulder some blame.

There is also much speculation that, in a bid to appear as a charitable white knight, Chancellor Gordon Brown will pull some extra money from the hat during Wednesday's Budget to help out the most hard-up.

But this shouldn't deflect attention from the evidence of maladministration that Ms Abraham says she found. Regardless of Mr Timms's opinion, judge these choice morsels from her report yourself.

In March 2002, the then pensions minister, Malcolm Wicks, said: "... legislation that is in place is to ensure that the pension rights that individuals have already built up in schemes are protected ..."

In the same year, a leaflet called "Occupational pensions: your guide for ordinary workers" was published by the Department for Work and Pensions. "You would be better off joining [a company scheme]," it said, adding that they were "usually a very good deal".

And critically, in a section entitled "How do I know my money is safe?" the leaflet made it clear that "you are protected by a number of laws designed to make sure schemes are run properly".

Yet any workers who followed this guidance, and then found themselves with a fraction of their pension entitlements because their firms went to the wall, cannot blame the Government.

Mr Timms argues that the report does not take proper account of the intention of the leaflets to "be simple and introductory".

There is also no evidence, he adds, that all of the complainants (who wrote to the Ombudsman about their pension rights, sparking the investigation) read any of the literature.

Which begs the question. Why did the Government print it in the first place; if its information was pointless, why bother?

If it was worth something, then last week's government protestations that the information was nothing more than basic pensions guidance rings rather hollow.

Amid the recriminations, it's worth remembering that companies which go to the wall usually do so under their own steam - and that a privately funded pension without enough assets to meet its obligations is a concern chiefly for the employers.

But when, as revealed by Ms Abraham's report, the Government has had a clear hand in these problems - through general advice given to staff and maladministration of pension funding levels - there is a degree of blame to be taken.

That it has washed its hands instead is just one of the "dreadful indictments" of this Government, says Ros Altmann, a pensions consultant and former No 10 pensions adviser.

How can any worker ever trust a government's words on pensions? she asks. And all this ahead of the planned National Pension Savings Scheme organised by, you guessed it, the Government. This car crash just doesn't end.

Independent Partners: 10 top tips for retirement. Get your free guide here

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Digital Optimisation Executive - Marketing

    £30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

    Recruitment Genius: Financial Reporting Manager

    £70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

    Recruitment Genius: Payments Operations Assistant

    £23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

    Recruitment Genius: Telephone Debt Negotiator

    £13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

    Day In a Page

    Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

    ‘We won’t stop until Syria is back to normal’

    Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
    The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

    The inside story of how Bill Clinton built a $2bn global foundation...

    ... and how it may undermine Hillary's chances in 2016
    12 best olive oils

    Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

    Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
    Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

    Benitez full of emotion at Bernabeu homecoming

    There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
    Sepp Blatter resignation: The beginning of Fifa's long road to reform?

    Does Blatter's departure mean Fifa will automatically clean up its act?

    Don't bet on it, says Tom Peck
    Charles Kennedy: The baby of the House who grew into a Lib Dem giant

    The baby of the House who grew into a Lib Dem giant

    Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
    Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

    The harrowing testament of a five-year-old victim of Syria's endless civil war

    Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
    The future of songwriting: How streaming is changing everything we know about making music

    The future of songwriting

    How streaming is changing everything we know about making music
    William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

    Recognition at long last

    Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
    Beating obesity: The new pacemaker which helps over-eaters

    Beating obesity

    The new pacemaker which helps over-eaters
    9 best women's festival waterproofs

    Ready for rain: 9 best women's festival waterproofs

    These are the macs to keep your denim dry and your hair frizz-free(ish)
    Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

    Wiggins worried

    Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
    Liverpool close in on Milner signing

    Liverpool close in on Milner signing

    Reds baulk at Christian Benteke £32.5m release clause
    On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

    On your feet!

    Spending half the day standing 'reduces risk of heart attacks and cancer'
    With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

    The big NHS question

    Why are there so few new GPs when so many want to study medicine?