- Helping members of occupational pension schemes to better understand their benefits.

23rd May 2019
:: Press Office | Press Releases | The truth about pension 'guarantees'

Press Release
The truth about pension 'guarantees' 
A survey conducted by revealed that, of those websites surveyed, 4 out of 10 which explained the different types of work-based pension schemes, wrongly stated that final salary schemes provide guaranteed benefits for members.
This comes after the high profile court case involving scheme members who lost significant amounts of pension benefits because of their employer’s insolvency. The scheme members argued that they had relied on Government documentation about the security of this type of pension scheme.
The widely publicised case, which has filled media headlines over the last 18 months, focused on documents provided by Government departments which indicated that final salary schemes were guaranteed. The fact is that this type of scheme provides a ‘promise’ of benefits rather than a guarantee.
Mike Jones, Director at said, “To find websites continuing to refer to final salary schemes as providing guaranteed benefits is rather worrying. What surprised us was that organisations have failed to update their websites. For advice-based websites this opens the companies up to potential compensation claims.”
The survey looked at a range of websites which included national and local organisations and a variety of referral-based, advice orientated as well as regulatory websites.
What was also revealed was that 1 in 4 of the websites surveyed had yet to be updated to take into account the changes introduced by the Government in April 2006 - what became known as ‘A-Day’.  
Mike Jones Ltd
PO Box 240
Tel: 0845 123 5670
Mobile: 07730 855 596
Fax: 0871 433 4662 
Notes for editors: 
  1. The survey focused on websites that contain descriptions about the different types of occupational pension schemes. This included Financial Services Authority regulated, and non-regulated organisations. Websites were first surveyed on 12th March 2007 and revisited on 30th April 2007. 
  2. A defined benefit scheme is a pension arrangement that provides specific benefits on the retirement of its members from an occupational pension scheme that are based upon salary and service – 'Final Salary’ (sometimes also called ‘Salary Related’) pension schemes and 'Career Average Revalued Earnings Schemes (CARE)' are types of defined benefit schemes. 
  3. A-day, 6th April 2006: the date on which most of the changes to the taxation of pension schemes and their benefits detailed in the Pensions Act 2004 and the Finance Act 2004 came into effect. Also became known as ‘Pensions Simplification’. 
  4. The Parliamentary Ombudsman has investigated the actions of the Department for Work and Pensions, the Treasury, the former Occupational Pensions Regulatory Authority and the National Insurance Contributions Office in relation to the security of final salary occupational pensions. In March 2006, Ann Abrahams, the PO, produced a 254-page report which said that the investigation uncovered evidence of real suffering, distress and uncertainty about the future among pension scheme members and their families, who had relied on government information when making choices about their future pension provision.
  5. In February 2007, the verdict of a Judicial Review upheld that the information produced by Government departments was misleading and that the Government was guilty of maladministration. The Government has appealed against elements of the Judicial Review verdict – in particular that that the Ombudsman’s findings cannot be rejected. 
  6. The Pension Protection Fund was established to pay compensation to members of eligible defined benefit pension schemes, when there is a qualifying insolvency event in relation to the employer and where there are insufficient assets in the pension scheme to cover Pension Protection Fund levels of compensation. For further details see:
  7. This Press Release is available online at: 
About provides pension education, information and communication for scheme members, trustees, sponsoring employers and advisers. The website presents facts and information. does not give advice; does not sell pensions, life insurance products, investments or mortgages.
In the UK, there are approximately:
20 million pension scheme members including over
10 million salary related pension scheme members
29,000 FSA regulated firms and 165,000 FSA regulated advisers
10,000 salary related schemes and 1,000's of sponsoring employers
176,000 trustees and 100's of associated organisations and support companies.
Release date:
30th April 2007

Article details:
Main article 232 words

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