£12 Billion FAS victory means ‘Christmas has come early’ for
125,000 pension victims say unions
17 December 2007
Reacting to today’s Parliamentary statement that the 125,000
people who lost their occupational pensions due their employer’s
insolvency and who currently qualify for the inferior Financial
Assistance Scheme (FAS) will now receive benefits on a par with the
those paid out by the Pensions Protection Fund (PPF), Community and
Unite unions, who have fought a five and half year campaign for
pensions justice on behalf of their members, have said that
‘Christmas has come early’ for all those affected. Five half years
ago there was no money to support them and after and half years the
unions’ campaign has secured over £12 billion to top up their
pensions.
Commenting, Michael Leahy, General Secretary
of Community, the union representingthe former employees of Allied
Steel and Wire (ASW), who lost their expected pensions due to the
Company's insolvency in July 2002, said:
‘Our ASW members are ecstatic at today’s
announcement that they will receive 90% of their full expected
pension, the same as those that qualify for there PPF. After five
and half years of legal and political campaigning – including
defeating the UK Government at the European Court of Justice –
today our members at ASW in Cardiff and Sheerness, as well as
those at Kaye Aluminium in Doncaster, Totectors shoes in Northants
and UNSCO steel in Sheffield, feel like Christmas has come
early.
‘This has been a story of successive political
failure by Conservative and Labour Governments which has caused
unnecessary suffering and anguish for those affected and has
undermined public confidence in the UK pension system. We are
delighted that the Government has finally listened and acted to end
this running sore
‘Five and half years ago 125,000 people faced
the prospect of losing a large percentage of their expected pension
and had no prospect of public support. Now we have secured over £12
billion to secure 90% of their pension and secured the ability for
them to retire at their scheme retirement age, be able to take some
of their pension as a lump sum, indexation of contributions after
1997 and enhanced benefits for widows and dependants. This is a
massive victory.’
Derek Simpson, joint General Secretary of
Unite trade union, said:
‘Unite is delighted that our members at
companies such as United Engineering Forgings in Ayr, Birmingham
and Sheffield will now receive 90% of their expected pension. This
has been a long, hard campaign but at last we have secured pensions
justice for them and the 125, 000 people similarly affected.
‘In addition, we are also delighted that we
have won the argument that those people in underfunded pension
schemes but who still have a solvent sponsoring employer should
benefit from PPF levels of support.
‘This is a classic example of the difference
that trade unions working together can make not only for the
benefit of their members, but society as a whole. Today Unite and
Community members across the UK should be proud of the fight that
their unions have fought and won.’
In January of this year ruling in a case taken
by Community and Amicus trades unions, the European Court of
Justice (ECJ) ruled that successive UK Governments had failed to
adequately implement Article 8 of the Insolvency Directive (see
Editor's note for details) which required pension scheme members'
expected occupational pension benefits to be protected in the event
of an employers insolvency.
Ends
Notes for Editors:
1.
Community and Amicus (now Unite)
issued a High Court claim on behalf of over 1,000 pension scheme
members of Allied Steel and Wire Ltd (ASW) from Cardiff and
Sheerness who lost the bulk of their pensions when the company was
declared bankrupt in 2002, leaving two pension funds in
deficit.
2. Article 8 of
the Insolvency Directive reads:
"Member
States shall ensure that the necessary measures are taken to
protect the interests of employees and of persons having already
left the employer's undertaking or business at the date of the
onset of the employer's insolvency in respect of rights conferring
on them immediate or prospective entitlement to old-age benefits,
including survivors' benefits, under supplementary company or
inter-company pension schemes outside the national statutory social
security schemes."
3. The
PPF provides for members to receive 90% of expected pension
benefits including payment at an early pension scheme retirement
age, tax-free lump sums, ill health or early retirement benefits
and dependants' benefits. There is also inflation linking for post
1997 contributions. Until today the FAS provided for none of
these.
For further information call: Ken Penton,
Community Head of Communications, 07764 570 516, Duncan
Harrod on 0207 239 1230/ 07740 176 916 or Ciaran Naidoo, Unite
Press Officer 07768931315
