Pensions redress unfair, say MPs

MEMBERS OF Parliament yesterday urged the Government to force shareholders to bear more of the pounds 15bn cost of pension mis-selling as they concluded their long-running inquiry into the scandal.

The Treasury Select Committee said shareholders in life insurers should bear "a substantial proportion" of the pounds 15bn compensation cost.

Many life insurers insist that compensation should be paid for out of long-term funds. Because of the structure of the funds, policyholders typically bear 90 per cent of the cost and shareholders only 10 per cent.

The chairman of the committee, Labour MP Giles Radice, said: "We think shareholders must pay more than 10 per cent. First, as shareholders of the company they must take some responsibility. Second, it seems to us that it is not fair to blame policyholders for actions by the company over which they have no control."

The MPs also want the Treasury to consider new laws to protect policyholders' rights in general.

They also said sales people's pay depended too heavily on commissions, and called on the Financial Services Authority, the City regulator, to develop guidance "so that excessive dependence on commission-based selling is reduced".