Conservative MP Edward Vazey has introduced a bill to allow the Parliamentary and Health Service Ombudsman to investigate pension transfers made out of the UK Atomic Energy Authority pension scheme.
The bill, introduced on Tuesday (June 11) under a 10-minute rule motion, intends to expand the remit of the institution, so it can look into the advice given by the secretary of state and the Government Actuary’s Department in this case.
AEA Technology was previously the commercial arm of the UK Atomic Energy Authority.
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 assessment, being transferred to the pensions lifeboat in 2016.
Mr Vazey said many AEA Technology Scheme pensioners maintained that "they were influenced by incomplete, misleading advice provided by UKAEA and the Government Actuary’s Department".
He said: "Some pensioners have lost about 10 per cent of their pension, but the cumulative impact for many will be that their pensions decline by between 30 and 50 per cent over time. That is a clear injustice.
"It is clear that my constituents and their fellow pensioners were misled 20 years ago in the advice on whether to retain their accrued benefits in what was effectively a government pension scheme, or to transfer them to a private scheme."
Mr Vazey noted that the advice the scheme members received in 1996 "was that the private sector scheme would be no less favourable than the public-sector scheme".
Mr Vazey said a full complaint was made to the ombudsman, which decided not to take any action, and part of the reason for that was because they were not able to review the advice of the Government Actuary’s Department.
He added: "At the heart of all this is a plain and simple fact: my constituents and others were misled in the advice that they were given, but they have no means of legal redress under the current ombudsman arrangements."
Frank Field, chairman of the Work and Pensions select committee, had previously highlighted this issue. In February 2018, he asked pensions minister Guy Opperman to allow this Parliamentary Ombudsman investigation.
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know.