Oral question asked in the House of Lords, by Lord De Mauley (Conservative). It was answered on Thursday, 23 March 2006.

Pensions: Ombudsman’s Report

Question: My Lords, I thank the Minister for that Answer. What action would Her Majesty’s Government take against any insurance company that had acted as they have done? Would they, as they did when insurers over-promised personal pensions, order them to pay compensation of £14 billion?

Answer: My Lords, I do not accept the premise behind the noble Lord’s question for the same reason that, after very careful consideration, we rejected the recommendations of the ombudsman. All the leaflets that the ombudsman was concerned with made it clear in specific statements that they were not a full explanation of the law and were for general guidance only. None of the leaflets or statements formed a proper basis for scheme members, still less trustees who are professionally advised, to assess the security of individual pension schemes. The report fails to demonstrate that decisions taken by individual scheme members were influenced by information that was or was not in those leaflets. The report did not establish that the wording of the leaflets led to losses suffered by individuals. We estimate that the cost of fully implementing the ombudsman’s recommendation would be £15 billion over a 60-year period. On the basis that we cannot accept those recommendations, we are not able to make those payments.

Secondary information

Type: Oral question
Reference: 680 c353
Session: 2005-06
Oral question type: 1st Supplementary
Chamber / Committee: House of Lords chamber
Subjects: Compensation Department for Work and Pensions Department of Social Security Liability Leaflets Maladministration Workplace pensions Misrepresentation Parliamentary Commissioner for Administration Pension funds Pension rights
Link: View this Oral question on www.publications.parliament.uk