The parliamentary ombudsman has criticized the UK government over misleading publicity presented to 85,000 consumers suggesting that their final salary occupational pension schemes would be protected.
Ann Abraham’s report is a bitter blow for the government, which insists that there is no evidence it deliberately or negligently misled the affected people.
Ms Abraham found that official information about the security of final salary occupational pension schemes provided over many years by the Department for Work and Pensions (DWP), the Occupational Pensions Regulatory Authority and other government bodies was inaccurate, incomplete, unclear and inconsistent.
Ms Abraham commented that, government has a unique responsibility in these matters. Government set the pensions policy framework and took upon itself the responsibility of providing information for the public. The maladministration which my investigation has uncovered caused injustice to a large number of people who, as a result, lost the opportunity to make informed choices about their future.
The ombudsman makes five recommendations to the government. Among them, the government should consider whether it should make arrangements for the restoration of the core pension and non-core benefits to those categories of scheme members covered by her report.
However the DWP has responded robustly to the charges. Pensions minister John Hutton told the BBC that the ombudsman had not established that people relied exclusively or alone or heavily on the leaflets we did produce as the basis for their financial decisions.
This was a general advice leaflet designed to provide general information. These leaflets were not designed to provide detailed financial advice for people to make investment decisions, he added.