Ex-ministers call for workers to get fairer pension compensation
Two former pensions ministers have urged the Government to press ahead with plans to give fairer pension compensation to the staff of failed firms.
Ros Altmann, who left the Government last week, said there is "no justification for delays to regulations for loyal, long-serving pensioners".
She said that for each week the changes are not in place, some pensioners are losing hundreds of pounds that they can never get back.
Steve Webb, who held the role of pensions minister immediately before Baroness Altmann, also said the Government should now "get on with implementing this change".
Lady Altmann had been working to get measures ready before the summer recess which would help some pensioners get fairer payments from the Pension Protection Fund (PPF), by increasing a cap on the payments people are allowed to receive.
She said the regulations should be announced before Parliament rises for the summer, adding: "They are ready now, so they should be introduced immediately".
The PPF acts as a lifeboat for pension savers by paying compensation to members of defined benefit (DB) pension schemes - such as final salary pensions - when firms have failed. Lady Altmann said the cap as it stands can result in long-serving staff losing most of their promised pension.
Mr Webb had laid the foundations for the changes to happen, with legislation giving the Government powers to change the cap with regulations.
Lady Altmann said "further delays are simply unfair".
She said: "Those workers entitled to fairer compensation from the PPF have already been waiting for years. It is true that the PPF offers good compensation to most people whose employer fails, however the PPF cap has hit some pensioners' payments significantly.
"In many cases they lose more than half their pension and this was recognised as unfair a few years ago. These higher pension payments will only begin from the date the regulations are actually laid, they will not be backdated.
"So each week of delay can mean the pensioners losing hundreds of pounds which they can never recover."
Lady Altmann said those affected are not "fat cats" - and they could be middle managers who have been with their company for decades and worked hard for their employer.
She went on to say that political considerations should not hold up the changes, adding: "It is a real injustice to allow the political fallout from the new Government to take money away from those who have lost so much of their pension through no fault of their own."
Lady Altmann was made a peer and appointed minister for pensions in 2015 after a career fighting for older people's rights.
She quit the role last week, saying in her resignation letter that her efforts to improve pensions policy over the past year had been thwarted by "short-term political considerations".
Mr Webb, who is now director of policy at Royal London, said: "Some workers build up relatively large pensions not because they are 'fat cats' but simply because they have worked all their life for one firm. Yet the current system of capping payments from the Pension Protection Fund takes no account of length of service.
"The Government has the legal powers it needs to give a fairer deal to long-serving workers, many of whom have no other source of pension income, and it should now get on with implementing this change."
A spokeswoman for the Department for Work and Pensions (DWP) said: "The PPF long service cap will give additional support to someone whose compensation has been capped and was a member of a pension scheme for over 20 years. We've committed to bringing this change in and will be legislating as soon as possible."