@dayslikethese1 the best known pensions scandal was Maxwell, where he stole money from the pension fund to prop up other businesses to hide that they were all failing. A bit simplified (as I’m not expected! - he set up different annual reporting dates for each company, so say on 1st March the real bank balance for Company A was £50m so looked OK. Then he’d quickly transfer it all over to Company B for their 1st April date. Eventually it all collapsed and good riddance, the bastard killer himself.
This led to lots of changes in the law - for example, it’s not legal now for a company to “borrow” from its pension fund.
Another thing that changed was the introduction of the Pension Protection Fund. This provides protection for certain types of company pension - the defined benefit “promise to pay” ones, where you don’t have your own pot of contributions invested. Companies have to pay into this fund. If a firm goes bust, their pension fund still exists - because it cannot be used by the company to avoid going bust. But, it almost certainly won’t be able to cover its pension commitments - because there are no more payments going in.
That is where the PPF comes in. They pay 100% of your pension to those already retired, and 90% to new retirees - up to a cap of approx £32,000 a year. So the protection is very good.
That would cover scandals like Maxwell, but also firms going bust now for reasons beyond their control rather than illegal actions.
Going back to the Maxwell pensioners... people tend to remember that they lost everything. And it had a major impact on pensions trust and confidence, and uptake, in this country. But actually most got about 50% of their pension. The government provided a bail out. Partly because at the time there was a process where you could ‘opt out’ of the state pension (SERPS). You and your employer would pay less NI - and you got a lower state pension. The saved NI was supposed to go into the pension with the theory that your company pension paid out more than your lost bit of state pension. The government opted the Maxwell pensioners back in - so their state pension wasn’t reduced despite them not paying full NI. The government also raised money from financial institutions who had worked with Maxwell and gained money from his businesses. I’m afraid I don’t know how that worked legally - but the upshot was that money was clawed back.
It was a scandal and a tragedy. But I bet some of those Maxwell pensioners with their 50% actually still have better pension provision than contemporaries who had no pension at all.
That’s not to downplay what that criminal Maxwell did. But it’s so important to raise awareness that the law changed.
I’m not saying there’ll never be a scandal again, with other methods... but it’s so important that people make informed choices. It is an ongoing scandal that Maxwell’s greed has impacted people who have never worked for him, were even born after he killed himself, maybe don’t even know his name - by creating a public distrust of pensions that leads them (influenced by older generations) to not fully research their options.