FSA rules out pension compensation

The Financial Services Authority (FSA) has refused an appeal to help compensate more than 65,000 people whose pension schemes have collapsed.

14:57 04 August 2004

The Financial Services Authority (FSA) has refused an appeal to help compensate more than 65,000 people whose pension schemes have collapsed.

The financial market regulator ruled that the body did not have any responsibility for occupational pension scheme losses occurring as a result of an employer's insolvency.

In a meeting this week John Tiner, FSA chief executive, made it clear that the FSA would not be held liable for pension losses, the Financial Times reports.

Ros Altman, a specialist in pension economics who has advised the government on retirement policy, argued that the FSA should take responsibility for continuing to tell scheme members their benefits were "guaranteed".

The pension expert claims that consumer booklets designed to help those deciding between occupational and personal pensions were misleading as late as December 2002.

The FSA insisted the booklets were for "general information" and not advice. It added that "they should be seen against the background of the time", when the FSA was most concerned that people were being lured away from occupational schemes into personal pensions.

Some 40,000 members face losses if the pension scheme of T&N, the engineering group, is wound up as expected and experts believe more company schemes are sure to follow.