HC Deb 25 March 2003 vol 402 c174W
Mr. Sheerman

To ask the Secretary of State for Work and Pensions what arrangements exist to compensate employees who lose a significant proportion of their company pension when the company goes into liquidation. [104089]

Mr. McCartney

The Government are sympathetic to the situation faced by members of pension schemes who find themselves in the unfortunate position of being in a scheme that has insufficient funds to secure all its liabilities when it is wound up.

A compensation scheme already exists to provide compensation for losses caused by dishonesty where the employer is insolvent. However, our Green Paper, "Simplicity, Security and Choice: Working and Saving for Retirement", (Cm 5677), published on 17 December 2002, contains additional proposals aimed at improving protection for scheme members if their schemes wind-up. We are seeking views on removing the restrictions on the amount of compensation payable under the compensation scheme, sharing out scheme assets more fairly, insurance for schemes that are wound up due to employer insolvency and on strengthening the protection for members whose solvent employer chooses to wind up its scheme. The consultation period for the Green Paper proposals runs until 28 March 2003.