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5th May 2020
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16th May 2020
 

Furloughed workers on final salary pension scheme should not be penalised with pensions hit as a result of Coronavirus crisis

 

Warrington North MP, Charlotte Nichols, recently asked the Chancellor whether employees who are members of a final salary pension scheme and whose wages are supported at less than 100 per cent under the Coronavirus Job Retention Scheme will experience a reduction to their pension entitlement if they retire while they are furloughed.


 
 

In answer to Charlotte’s question, Economic Secretary to the Treasury and City Minister, John Glen said:

“…For members of final salary pension schemes, whether or not the act of being furloughed will affect member benefits will be dependent on individual scheme rules. Many schemes have provisions in place to account for reductions in income in the years leading up to retirement without it affecting their pension if, for example, members choose to work fewer hours ahead of retiring. How each scheme works is a matter for the trustees and the sponsoring employer.”

Responding to the Treasury, Charlotte said:

"Everyone deserves a pension that affords them security and dignity in retirement.
"Employees on final salary pension schemes who have been furloughed during the Coronavirus crisis through no fault of their own and who are now due to retire should not be penalised.
“At a time of such great uncertainty, the government’s response to my question does little to offer reassurance to those affected.
"The government should look again at this issue and offer the security that those affected rightly deserve."