A report due out this week from the UK parliamentary ombudsman is expected to blame the government for occupational pension scheme collapses that have affected 85,000 workers.
The report by Ann Abraham, due to be published on March 15, may land the Department for Work and Pensions with a GBP5 billion bill to compensate workers who lost their pensions when the companies they worked for went bust.
The investigation is expected to conclude that people lost out when the government relaxed rules designed to safeguard pension schemes, while simultaneously reassuring employees that their pensions were safe. However, ministers may not accept the findings and dispute their part in the losses.
A compensation fund, known as the Financial Assistance Scheme, has already been set up to compensate workers. However, the fund does not restore full pensions and has been criticized for slow payouts. The ombudsman’s report is expected to call for full restoration of pensions at a cost of GBP110 million a year, spread over 40 years.