Community: The Union for Life

Reacting to today’s Parliamentary statement that the 125,000 people who lost their occupational pensions due their employer’s insolvency and who currently qualify for the inferior Financial Assistance Scheme (FAS) will now receive benefits on a par with the those paid out by the Pensions Protection Fund (PPF), Community and Unite unions, who have fought a five and half year campaign for pensions justice on behalf of their members, have said that ‘Christmas has come early’ for all those affected. Five half years ago there was no money to support them and after and half years the unions’ campaign has secured over £12 billion to top up their pensions.

Commenting, Michael Leahy, General Secretary of Community, the union representing the former employees of Allied Steel and Wire (ASW), who lost their expected pensions due to the Company's insolvency in July 2002, said:

‘Our ASW members are ecstatic at today’s announcement that they will receive 90% of their full expected pension, the same as those that qualify for there PPF. After five and half years of legal and political campaigning – including defeating the UK Government at the European Court of Justice – today our members at ASW in Cardiff and Sheerness, as well as those at Kaye Aluminium in Doncaster, Totectors shoes in Northants and UNSCO steel in Sheffield, feel like Christmas has come early.

‘This has been a story of successive political failure by Conservative and Labour Governments which has caused unnecessary suffering and anguish for those affected and has undermined public confidence in the UK pension system. We are delighted that the Government has finally listened and acted to end this running sore

‘Five and half years ago 125,000 people faced the prospect of losing a large percentage of their expected pension and had no prospect of public support. Now we have secured over £12 billion to secure 90% of their pension and secured the ability for them to retire at their scheme retirement age, be able to take some of their pension as a lump sum, indexation of contributions after 1997 and enhanced benefits for widows and dependants. This is a massive victory.’

Derek Simpson, joint General Secretary of Unite trade union, said:

‘Unite is delighted that our members at companies such as United Engineering Forgings in Ayr, Birmingham and Sheffield will now receive 90% of their expected pension. This has been a long, hard campaign but at last we have secured pensions justice for them and the 125, 000 people similarly affected.

‘In addition, we are also delighted that we have won the argument that those people in underfunded pension schemes but who still have a solvent sponsoring employer should benefit from PPF levels of support.

‘This is a classic example of the difference that trade unions working together can make not only for the benefit of their members, but society as a whole. Today Unite and Community members across the UK should be proud of the fight that their unions have fought and won.’

In January of this year ruling in a case taken by Community and Amicus trades unions, the European Court of Justice (ECJ) ruled that successive UK Governments had failed to adequately implement Article 8 of the Insolvency Directive (see Editor's note for details) which required pension scheme members' expected occupational pension benefits to be protected in the event of an employers insolvency.

Ends

Notes for Editors:

1. Community and Amicus (now Unite) issued a High Court claim on behalf of over 1,000 pension scheme members of Allied Steel and Wire Ltd (ASW) from Cardiff and Sheerness who lost the bulk of their pensions when the company was declared bankrupt in 2002, leaving two pension funds in deficit.

2. Article 8 of the Insolvency Directive reads:

"Member States shall ensure that the necessary measures are taken to protect the interests of employees and of persons having already left the employer's undertaking or business at the date of the onset of the employer's insolvency in respect of rights conferring on them immediate or prospective entitlement to old-age benefits, including survivors' benefits, under supplementary company or inter-company pension schemes outside the national statutory social security schemes."

4. The PPF provides for members to receive 90% of expected pension benefits including payment at an early pension scheme retirement age, tax-free lump sums, ill health or early retirement benefits and dependants' benefits. There is also inflation linking for post 1997 contributions. Until today the FAS provided for none of these.

For further information call: Ken Penton, Community Head of Communications, 07764 570 516, Duncan Harrod on 0207 239 1230/ 07740 176 916 or Ciaran Naidoo, Unite Press Officer 07768931315

Ken Penton

Head Of Communications

Tel: +44 (0)207 239 1243

Mob: +44 (0)7764 570 516