Michael Fabricant has expressed his concern following publication of a survey produced by actuaries Bacon & Woodrow identifying 17 pension schemes run by FTSE 100 companies that may be unable to make promised payouts.
"The Lichfield Parliamentary constituency has an older population than the national average. This survey shows that people saving for their future need to be aware of potential fluctuations in the performance of pension schemes. If the trend highlighted in this survey intensifies, both companies and individuals will need to save more money in order to guarantee the retirement income they have planned for. The Government must take responsibility for part of this situation. Their largest stealth tax in the last Parliament was the cynical £5 billion raid on pension funds. This brought short term gains for The Treasury with the Government knowing full well that the effects would not be felt for some years." says Michael Fabricant.
According to the Bacon & Woodrow survey, the schemes had cash shortfalls of as much as £170 million and affected major companies including Tesco, Marks & Spencer, ICI, Scottish & Newcastle, Vodafone and BT. In June 1997, Chancellor Gordon Brown abolished the Advance Corporation Tax (ACT) dividend tax credit, taking £5 billion a year from occupational and personal pension funds.
"I would urge all my constituents paying into a pension plan to check regularly with their employers or private pension companies whether they will still be able to deliver the pensions originally expected" adds Mr Fabricant.