BusinessCompany NewsConcern over pensions bail-out plans

Concern over pensions bail-out plans

Government proposals for a pensions bail-out scheme would mean the best-run companies having to cough up for bankrupt ones, it has emerged.

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The Financial Times has reported seeing the plans, which would controversially favour a flat-rate levy to fund protection for pensions in companies that have gone to the wall.

The CBI has been among those calling for a premium scale levy, which would vary the burden according to a company’s risk of going bust. Otherwise, it fears strong companies with well-funded pension schems will be have to bear a disproportionate burden of the cost of helping those who have run into trouble.

The government proposals envisage the creation of a board to run the fund, which would in time devise a risk-based system. But that has not been enough to prevent concerns that the government is passing the buck.

The plans are due to be announced as part of the pensions bill later this week.

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