A leading pensions campaigner accused the insurance industry yesterday of a staging a carefully concerted PR campaign designed to stymie efforts to compensate thousands of victims of pension scheme failures.
Ros Altmann, who has spent the past five years campaigning on behalf of tens of thousands of final salary pension scheme members who lost out when their employers went bust, claimed leading insurers had misled MPs as they prepare to vote tomorrow on amendments to pensions legislation.
The amendments would require Peter Hain, the new secretary of state for pensions, to force financial services companies ranging from insurers to banks to declare the sums they hold in unclaimed and untraced assets. Ms Altmann said up to £20m a year of this money could then be used to plug holes in the Financial Assistance Scheme, a lifeboat fund set up to help pension scheme victims which is currently short of the assets it needs.
However, the insurance industry is concerned that ministers may choose to focus solely on unclaimed assets from life insurance and pension policies, estimated to be worth up to £20bn.
The UK's two biggest insurers, Aviva and Prudential, are working on proposals to unlock some of this money, known in the industry as "inherited estate", which would be shared between shareholders and policyholders.
Ms Altmann said several insurers had told MPs voting for tomorrow's amendments would mean sanctioning a raid on the inherited estate, including money held in the pension funds of insurance company policyholders.
"The insurance industry is petrified of even declaring how much of this money there is and has embarked on a spinning exercise that seeks to circumvent the Parliamentary process and prevent help getting to the victims of this scandal," Ms Altmann said. "All we need for the lifeboat fund is £20m a year, so insurers' claims that ministers could take billions of pounds from people's pension funds are total nonsense."
Ms Altmann said that even if the Government did end up deciding to shore up the FAS with money from unclaimed assets, there was no guarantee the cash would come from insurance firms.
The row comes as Andrew Young, appointed by the Department for Work and Pensions to examine "non-public funds" as potential sources for an FAS top-up, prepares to publish his interim report today.Reuse content