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Pensions: Compensation

Volume 460: debated on Monday 21 May 2007

To ask the Secretary of State for Work and Pensions what his latest estimate is of the cost of providing compensation to members of pension schemes with a solvent employer who have lost pension savings at (a) financial assistance scheme levels and (b) pension protection fund levels in (i) cash terms and (ii) net present value terms. (136024)

The total number of pension schemes with solvent employers which have commenced winding-up is not known, so we are unable to provide any estimates relating to members of such schemes, other than for those we are aware of with compromise agreements.

We estimate that the cost of providing assistance at the levels requested to members of pension schemes which have reached a compromise agreement is as follows:

(a) (i) £570 million at Financial Assistance Scheme rates in cash terms.

(ii) £130 million at Financial Assistance Scheme rates in NPV terms.

(b)(i) £760 million at Pension Protection Fund levels in cash terms.

(ii) £180 million at Pension Protection Fund levels in NPV terms.