Memorandum by Joe Blair
I commenced work in 1959 as an Apprentice Draughtsman
prior to becoming a Mechanical Engineer working mainly in manufacturing
industries. In August 1974 I took up a position with Irish Fertilizer
Industries (formerly Richardsons Fertilisers Ltd) working there
for just over 28 years until I was made redundant in October 2002
when the company went into voluntary liquidation. The shareholders
of the company were the Irish Government (51%) and Imperial Chemical
Industries Ltd (49%). I joined the company final salary pension
scheme (Richardsons Fertilizer Staff Retirement Benefits Plan)
in August 1974 (at 31 years of age) as a condition of my employment,
and my long-term plan for retirement was effectively set in motion.
The scheme promised that "the Plan must have adequate resources
which satisfy the Minimum Funding Requirement of the Act, which
is designed to make sure that the benefits are protected whatever
happens to the company" and also that "the Plan is designed
to provide you with a Guaranteed Pension related to your earnings—and
therefore to your standard of living—close to retirement".
I like many others were concerned when the Maxwell
scandal came to light but were completely assured by the Pensions
Act 1995 that was designed to ensure that it could never happen
again. Over the years I have relied heavily on information issued
by government stating that my pension was safe and guaranteed
and there was never any warning of risk associated with pensions,
eg Occupational Pensions—Your Guide issued by the Pension
Service which is part of the DWP. It answer to the question "Why
do I need a pension?" it states, "Everyone needs to
plan ahead for retirement". It also advised "If your
employer offers access to an occupational scheme, it is worth
joining". Had there been any indication of risk associated
with my pension I would have either taken early retirement or
left the company. I reached pension age (62) in June 2005 and
am being paid the sum of £2,596,92 per annum whereas I should
be receiving a preserved basic pension of £15,207.19 (plus
a supplementary pension also based on years of service). I suffered
a serious heart attack in April 2004, which required surgery,
and I am still being treated for heart failure for which I take
medication on a daily basis. I am certain and medical staff would
agree that the worry regarding my pension have caused this illness.
I complained to the Parliamentary and Health
Service Ombudsman's office regarding final salary pensions and
was selected as one of four representative complainants to be
interviewed by an officer from the Ombudsman's office. I find
the comments made about the four representative complainants in
the Works and Pensions response to the PO's report really quite
disgraceful. It has been suggested by the DWP that people like
me did not understand what they read in print, however having
read it they should have disregarded it and then taken independent
financial advice. I trusted this government and what it said about
my pension being safe and guaranteed and I have been badly let
down by it. I have lost all faith in pensions and the government
must bear the blame for this. I have three sons and only one has
an occupational pension. How on earth can I be expected to advise
my remaining two sons to join any pension scheme? I can assure
your committee that I will do all in my power to pass this message
on to all especially young folk.
The initial relief which information about the
Financial Assistance Scheme gave has now given way to totally
despondency. The retirement age for my pension was 62 but FAS
does not kick in until 65. This is grossly unfair as I am loosing
out on a large proportion of my pension, which has already been
paid for, and yet I am not receiving. In fact it is very unclear
if I will be covered by FAS and if so exactly how much I might
receive. However I should point out FAS is not covered for inflation
so I will become progressively poorer as I grow older (my pension
had an inflation percentage of up to 5% built in). You should
be aware that in her report the P O has stated that compensation
not assistance is what is required and in my opinion would go
a long way to restore the general publics faith in pensions.
How is it that when dealing with the public
sector, pension problems can be resolved (ie the attempt to raise
the pension age to 65 was abandoned) and indeed the government
sorted out their own pensions difficulties, however, the government
is refusing to find the resources to compensate 85,000 people
in a similar position to myself because as the PM stated it will
cost £15 billion.
15 June 2006
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