Britain Creates $5.9B Pension-Payment Plan
Posted on: Monday, 17 December 2007, 18:00 CST
British officials said Monday they created a $5.9 billion plan to rescue 130,000 workers whose pension plans collapsed.
The plan will restore 90 percent of the benefits of workers whose pension plans collapsed before 2005, Work and Pensions Secretary Peter Hain told Parliament.
The pension payments through an expanded Pension Protection Fund, which had only covered workers as of 2005, will be given to retirees as young as 60 and increase each year in line with inflation, he said.
Until now, workers whose employers went bankrupt before 2005 -- taking their pensions with them -- were covered by a separate, government-funded program called the Financial Assistance Scheme, which paid 80 percent of a worker's basic pension, up to $24,200 a year and had no inflation protection.
It also didn't pay retirees until they turned 65, even if they were due to retire at age 60, Britain's Guardian reported.
In January, the European Union's highest court, the European Court of Justice, ruled Britain had not met EU standards with the Financial Assistance Scheme.
Labor unions had campaigned for the greater protection for more than five years.
Source: United Press International
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