Defined Benefit  

Field calls for probe into AEA pension scheme

Field calls for probe into AEA pension scheme

Labour MP Frank Field is calling for the government to allow the complaints of defined benefit (DB) AEA Technology Scheme members to be reviewed by an ombudsman.

The chairman of the Work & Pensions select committee wrote to Guy Opperman, minister for pensions and financial inclusion, asking him for this proposal to be included in the government’s upcoming defined benefit (DB) white paper, which will be published during the spring.

AEA Technology was previously the commercial arm of the UK Atomic Energy Authority (UKAEA).

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When it was privatised in 1996, some 3,000 employees were transferred from the UKAEA's public sector pension schemes to a private sector scheme sponsored by their new employer.

When they transferred, those employees were given a choice about whether to leave the pension they had already built up before privatisation in the UKAEA's schemes, or transfer it across to AEA Technology Scheme.

AEA Technology subsequently entered administration in November 2012, and its pension scheme entered into Pension Protection Fund (PPF) assessment, being transferred to the pensions lifeboat in 2016.

According to Mr Field, the Government Actuary's Department (GAD) provided written information to AEA Technology employees at the time of its privatisation in 1996, which "helped reassure many of them that it was safe to move across" the pension schemes, "on the grounds that the latter scheme was no less favourable".

He said: "Many AEA Technology pensioners have suffered financial detriment and feel that the GAD information misled them as to the potential adverse ramifications of the transfer.

"I understand that neither the Pensions Ombudsman nor the Parliamentary and Health Service Ombudsman (PHSO) have within their remit to investigate maladministration in respect of information of this type provided by GAD."

Due to this, Mr Field is asking for the government to expand the scope of one of these institutions, so that the information provided by GAD to scheme members can be investigated.

It is not the first time that the AEA Technology scheme is addressed in Parliament.

Back in 2015, a group of MPs demanded compensation for members of the final salary pension scheme.

Trade union Prospect has welcomed Mr Field’s initiative.

According to David Luxton, Prospect official responsible for members of the AEA Technology scheme, "thousands of people suffered significant pension losses as a result" of the privatisation of company and its subsequent insolvency.

He said: "There are legitimate concerns about the information that was provided to members at the time of privatisation. It is only right that these concerns are fully investigated by an independent body."

maria.espadinha@ft.com