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Bulletin Board Malcolm McLean OBE For my sins, I do an hour long pensions phone-in programme every month on a commercial radio station called TalkSport. In case you are wondering the sport bit is not strictly representative of the whole of the station's output - they do other things, not least current affairs which these days inevitably includes pensions. Normally, there is a wide range of questions - including such things as whether to contract in or out of SERPS/S2P, early retirement, ill-health pensions, transfer options, pension entitlement whilst abroad, stopping and starting a pension, wind-up delays and so on. The responses I try to make to these questions are, of course, fairly general and non-specific as I have to avoid giving financial advice - but I do try to be as helpful and informative as possible and we do have some quite lively debates on the many issues that are raised. I am also well seized of the fact that in addition to whatever improvement in knowledge I am able to spread, I myself frequently learn a lot during the course of a programme about public views and attitudes to the issues of the day. For example, on the day of the second reading of the Pensions Bill in Parliament, instead of the usual free-for-all, the whole of the time available was devoted to a single topic, that of pension protection and the plight of those such as the ASW workers who had lost their pensions in the wake of their company's insolvency. Listeners were invited by the programme presenter to ring in and express their views on this issue and so for the best part of an hour I sat in the studio listening to what people thought and what they believed the government should do. It was extremely enlightening and brought home to me the full extent of the government's dilemma in this respect. We had the man who was in no doubt that the Government should fully compensate those who had lost their pensions. It was, he said, a proper use of tax payers money. These people had tried to save for their old age and had their savings cruelly taken away from them through no fault of their own. He did not mind his taxes being used to pay out compensation. He preferred it to be used for that purpose rather than the "scroungers and layabouts" who were making no attempt to provide for themselves. But then along came the caller who said she was an Equitable Life victim and if the Government was not going to compensate her (and she seemed very sure about that) she did not see why they should compensate the ASW workers or anybody else. Another contrary view was expressed by a gentleman who said he has always shunned pensions and invested his money direct into the stock market - and had lost thousands. He too did not expect anyone to compensate him and did not see why others should expect the Government to help them out with his and other taxpayers' money. All investments carry risk, he concluded, and nothing in this life is certain. We had the listener who did think that compensation was appropriate but only for those people who were compelled as part of their contract of service to join the company's pension scheme - not everyone else. Nor did he think the Government should support the new Protection Fund - that should stand or fall on its own feet and absolute security could not ever be guaranteed. Another caller wanted the government to compensate in full everyone that had lost money to date and undertake to underwrite the new Pensions Protection fund so that none of this could ever happen again. After the programme on the way back to the office my head was still spinning as I passed the demonstrators outside the House of Commons and around Parliament Square. Looking at the banners and posters carrying such slogans as "A pension promised should be a pension paid", you couldn't help but feel immense sympathy with everyone there. There was a feeling that they had been badly let down by the system and surely something had to be done. But what? I have to say on the basis of the calls I received on the radio there is a potential for opening a real can of worms here and producing a knock-on effect for a variety of other aggrieved parties. The government will also have to be wary of relevant European directives and the scope for being taken to the courts for alleged failure to fully comply with them. It may be a case of being damned if they do or damned if they don't - a real dilemma whichever way you look upon it. By the time this article appears government ministers may have announced what they intend to do. At this point in time it is impossible to guess which way they will eventually decide to go.
Malcolm McLean OBE |
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