Government to 'weaken' pension plan

Click to follow

The Government yesterday signalled it would scrap elements of its planned insurance fund for pension schemes that go bust, following opposition from business.

Andrew Smith, the Secretary of State for Work and Pensions, said his department was in favour of "looking at new ideas" that may make the proposed Pension Protection Fund more acceptable. Companies at the moment face funding the project from their own coffers.

He raised the prospect of taking the "strength of the employer" into account when the Government is calculating the levy that each company will have to pay. This should mean companies with financially- sound pension schemes would have to bear less of the burden for the industry-wide pool which will underwrite all member company pension schemes.

Mr Smith attempted to mend fences with British businesses over the PPF at a conference held by the CBI.

He refused to be drawn on another initiative that is unpopular with many - its plan to cap pension pots at £1.4m before punitive tax rates kick in.