ASW Pensions

The UK parliamentary ombudsman, Ann Abraham, reported today on her investigation into actions by UK Government bodies relating to the security of final salary occupational pensions. The role of the ombudsman is to consider complaints that individuals have suffered injustice as a consequence of maladministration on the part of UK Government departments and other bodies within her jurisdiction.

The First Minister and I are well aware of the plight of the individuals and their families affected through our many discussions on behalf of former Allied Steel and Wire workers. Following ASW’s going into receivership, we have made the reinstating of full pension rights to ASW workers a priority, and we continue to work closely with the Community union on behalf of former ASW workers to ensure reinstatement of their pension entitlements.

Pension policy is a reserved function, but the Assembly Government has nevertheless ensured that the plight of former ASW employees continues to be heard. Following ASW’s going into receivership in 2002, as a Government, we brokered a number of meetings with the receivers, the pension trustees and the Department for Work and Pensions, including past and current Secretaries of State, to press the case for the reinstatement of pension entitlements to all those who, like ASW workers, were affected by a pension shortfall. Indeed, it is probable that the well-organised official ASW campaign was instrumental in forming a pension protection fund to ensure that workers get a decent pension if their firm goes bust in the future.

On 14 May 2004, Andrew Smith, the Secretary of State for Work and Pensions, announced the financial assistance scheme to help those not covered by future legislation. However, it became clear that the financial assistance scheme will not provide blanket support to all members of eligible pension schemes. Indeed, under current legislation, only a small percentage of former ASW workers will benefit. We have continued to press for the inclusion of all affected pension scheme members in the financial assistance scheme, and we raised this matter recently with the Secretary of State at a meeting that was jointly chaired by the First Minister and Mick Leahy, the general secretary of the Community union. I was pleased, therefore, to hear the Prime Minister speaking today about expediting the financial assistance scheme, which is still under review. We would fully endorse that.

The ombudsman’s report makes five recommendations to the UK Government, one of which is that it should consider whether arrangements should be made to restore the core pension and non-core benefits to those categories of scheme members covered by her report. The UK Government has carefully considered the report, but it does not accept that maladministration occurred, or that taxpayers should cover the costs of the pensions promises made by employers, an amount estimated at some £15 billion. The UK Government has said that responsibility must fall on those companies whose schemes were being wound up, and on the trustees who, with the benefit of professional advice, were responsible for protecting members’ interests. There will be much further discussion on this matter, and, as a Government, we will consider the ombudsman’s report fully. We will do our part by continuing to push for all former ASW workers in the financial assistance scheme. As a Government, we continue to represent the best interests of the Community union members and their families.