“We believe the general tone of this note is likely to discourage people from transferring to the AEAT [pension] scheme….and have suggested a few places where the tone could be modified.” so wrote Atomic Energy Authority Technology to the Government Actuary Department in 1996. They did so having reviewed the latter’s draft guidance to UK Atomic Energy Authority Employees who would be transferring to them as part of the privatisation of UKAEA’s commercial activities. The guidance was duly strengthened, but AEAT went bust in 2012, meaning the value of the pensions of those who transferred are now worth considerably less (35% on average) than they would have been.
Readers may be familiar with the campaign of the AEAT Pensioners; indeed, at least a few readers will likely be pensioners involved in the campaign. Earlier in the year I established an All Party Parliamentary Group (APPG) of MPs and Lords, which I chair, for the campaign and this week I am introducing what is known as a 10 Minute Rule Bill on behalf of their cause, picking up the Bill that my predecessor, Ed Vaizey, introduced 6 months before he stood down.
Back in 1996 the then Government privatised the commercial arm of UKAEA. Those in possession of UKAEA pensions were given 40 days to accept what they were told were time limited terms. They were told it was unlikely the benefit promise made to them would ever be broken and they would secure identical (or very close to it) terms. Nine in ten of the pensioners accepted the advice and transferred to the new scheme.
But what they didn’t know at the time was that the company they were joining would go into pre-pack administration less than 20 years later. Still less were they aware that the Government Actuary Department had amended its guidance to them having been encouraged to by the company, something they found out through a Freedom of Information request after dogged work by the energetic and inspiring campaign group.
We’re all familiar with pension schemes which, for all sorts of reasons, end up being worth a lot less than promised – indeed, I am a member of the Equitable Life APPG on behalf of constituents affected by that scandal. However, the AEAT case is unique both because they were assured their pension would be ‘no less favourable’ but also because the Government’s Actuary changed its guidance to encourage them to switch.
Usually, the Parliamentary Ombudsman would investigate the advice and information given, but it needs a change in its remit to enable it to do so, hence the bill to enable this. It will be a long road, but the pensioners are overdue redress for their complaint.
