Advice service employees could have pensions halved

    Around 200 employees of an organisation that provided advice
    through the Connexions Service could have their company pensions
    cut by over 50 per cent, it was alleged last week,
    writes Amy Taylor. 

    Employees of Essex Careers & Business Partnership are facing
    a cut after the company lost the contract to provide services for
    EST Connexions partnership. The company was put into voluntary
    liquidation by its owners Essex, Southend and Thurrock
    councils.

    EST Connexions, the social advice service for young people, has
    decided to provide its services itself after the government made a
    £25m cut in the £40m provided for partnerships that use
    private service providers. The saving should to be used to help
    fund services outlined in the Children Bill.

    The vast majority of the employees have been transferred over to
    EST Connexions but it has refused to take over the pension
    scheme.

    Chris Martin, managing director at Independent Trustee Services,
    the company that has been appointed to oversee the pension scheme
    following the voluntary liquidation, said that the scheme could
    have a shortfall of around £5.5m and that people could loose
    over half of their pensions. The voluntary liquidation of the
    company means it is not liable to make up the majority of the
    deficit.

    “In the light of the government’s proposed
    amendments to the Pensions Bill aimed at preventing organisations
    from changing their circumstances to minimise their financial
    obligations to pension schemes, ITS will seek to recover the full
    buy out cost from the councils so that members can receive the
    benefits they were expecting,” he said.

    A spokesperson for Essex council said: “We had to balance
    our responsibilities to the workforce with our responsibilities to
    the council tax payer.”

     

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