1 The AEA Technology (AEAT) Pensions Campaign seeks to restore pensions earned in the AEAT Pension Scheme to their promised values. We welcome the current inquiry because we strongly believe that we are victims of a pension scam committed by the government.
2 We outline how the government has set a bad example of pension mis-selling. Then we respond to some of the select committee’s questions, based on our experience. Finally, we present the facts of our case in more detail in a one-page timeline.
Government has set a bad example
3 When AEAT was privatized out of the UKAEA, the government persuaded most employees to move their pensions into an unsuitable scheme. This set an example to the private sector that such behaviour is acceptable. The government should put its own house in order before expecting the private sector to behave properly.
4 The UKAEA pension schemes were guaranteed by the government. The government had a duty (stated in the Atomic Energy Authority Act 1995) to ensure that the benefits of the new AEAT pension were “no less favourable” than the old one.
5 Who would have thought that the government could ignore the relative security of the pensions when comparing the new pension scheme with the old ones – a question of long-term financial security of the pensioners? Yet, that is what they did.
6 What’s more, the Government Actuary’s Department (GAD) provided dodgy financial advice on our pension choices. It did not state that the government had ignored the relative security of the schemes. And it did not state that the private AEAT Pension Scheme was less secure than the UKAEA ones. As a result, nearly 90% of eligible workers transferred their past service benefits, earned in the UKAEA schemes, into the AEAT Scheme.
7 Now that the private AEAT scheme has failed, pensioners expect to lose about a third of their pensions – some more, some less.
8 Although the mis-selling occurred in 1996, the government has repeatedly refused to put this right and, since the reforms of 2015, has made sure that the law continues to prevent the Financial Ombudsman, the Pensions Ombudsman, and the Parliamentary and Health Service Ombudsman (PHSO) from investigating our case.
9 Pensions minister Richard Harrington MP even argued that the GAD advice was not designed to be advice in a Westminster Hall debate on 26/10/16. But the PHSO, in a letter to David Johnston MP dated 26/8/20, confirmed that it was advice.
10 Further information on the AEAT Pension Scheme injustice may be found in a letter from Andy Bye (Secretary, Prospect Retired Members’ Group) to Rt Hon Stephen Timms MP (14/7/20), the House of Commons Brief “AEA Technology pensions” (CBP-07740, 24/4/19) and the “AEA Technology Pensions Dossier”, Edition 2, January 2018 (please search online for “AEA Technology Pensions Dossier”).
Inquiry questions and answers
11 These answers are based on our experience with the AEA Technology Pension Scheme.
Q1 What is the prevalence of pension scams?
A The government led the way by scamming UKAEA pensioners transferring to AEAT in 1996.
Q2 What are the current trends in pension scams?
A The government has not acknowledged its own scam.
Q3 What are the common outcomes of pension scams for perpetrators and victims?
A The perpetrators have not been held to account. The victims lose pensions.
Q4 How are existing enforcement tools being used?
A Government has ensured that their AEAT pensions scam remains outside the scope of the Financial Ombudsman, the Pensions Ombudsman, and the Parliamentary and Health Service Ombudsman.
Q5 What more can be done to prevent pension scammers operating?
A The government could set a good example (instead of a bad one) by permitting an independent investigation of AEAT Pensions and restoring them to the promised values.
Q9 Are public bodies co-ordinating the response to pension scams?
A No, on the contrary, AEAT pensioners’ complaints have been subject to much buck-passing between government departments. In 2015, PHSO formally recommended that DWP apologise for the confusion they had caused us over roles and responsibilities. Since then, successive Pensions Ministers have made misleading statements to MPs, in parliamentary debates on AEAT Pensions in 2015 and 2016 and in a 2018 letter to the Chair of the Work and Pensions Select Committee.