Call for pensions flexibility

Click to follow
The Independent Online
PENSION schemes are being asked to readmit employees who were given poor financial advice and left to take out a personal pension, writes Vivien Goldsmith.

The National Association of Pension Funds, which represents two-thirds of occupational schemes, is asking schemes to reinstate past service rights subject to an adequate payment ahead of the expected announcement by SIB, the leading City regulator, of compensation plans next week.

A recent NAPF survey showed that 27 per cent of company pensions do not allow current employees to rejoin the pension scheme. Schemes are less inclined to readmit ex-employees.

David Morgan, treasurer of the NAPF, said: 'We hope people will be flexible.

There are some schemes which won't let people back. But some of the names I would have expected to be hard are prepared to let people back in; while others said very clearly in 1988 when membership became voluntary that they would not let people back in.'

Some schemes, including the miners' pension scheme, have improved benefits for members and in these cases, Mr Morgan said, the scheme would expect returning members to have adequate compensation so that they could buy their full enhanced rights.

Ron Amy, chairman of the NAPF, said: 'Decisions on re-admission for future service and re-instatement for past service of employees who were given bad financial advice are for each scheme to determine individually.'