§ The Secretary of State for Work and Pensions (Mr. Andrew Smith)The Pensions Bill introduces the pension protection fund that will ensure workers get a worthwhile pension when the sponsoring employer becomes insolvent and their scheme winds up underfunded. But the protection the fund gives is cover for the future, and cannot help those who have already lost out.
The severe losses that some individuals have already suffered in insolvent pension wind-ups has caused considerable hardship. The Government will therefore make available £400 million of public money to be paid in instalments over 20 years with the possibility of further contributions from industry, to provide assistance in such cases.
Details of the fund's operation will be worked out in consultation with stakeholders, and we will review the operation of the fund in three years' time.
The Government are tabling an amendment to the Pensions Bill today. A copy of this is set out below: