Legislation introduced by previous chancellors has been responsible for the problems facing company pensions, it has been suggested.
Occupational pension schemes have been hit hard by government tax grabs, according to a new report from the Taxpayers' Alliance. It claims that the value of pension funds has been reduced by up to £225 billion since the early 1990s.
The group states that the decision by former Conservative chancellor Norman Lamont to cut tax credits on share dividends paid into pension funds in 1993 delivered the first blow to company pensions.
Then in 1997, Gordon Brown, in his first budget as chancellor for the newly-elected Labour government, scrapped them altogether in a move that has been cited as responsible for the decision by some employers to close down their final salary schemes.
In its report, the Taxpayers' Alliance states: "There is a pressing need for major and immediate reforms to cut the shameful and unsustainable costs of public sector schemes, often supported by taxpayers who have watched their own schemes disappear or decline, usually at the hands of government."
Aon Consulting recently described the 2009 outlook for final salary pensions as the bleakest ever, claiming that schemes have lost around £226 billion in the last 12 months as a result of poorly performing investments.
