Employers’ group the CBI have dismissed the new Pensions Bill which received Parliamentary endorsement on Thursday, as a ‘missed opportunity’ to restore employer confidence in pensions.

The Bill contains provision for a £400m Pension Protection Fund (PPF), which is intended to provide better protection for the accrued rights of staff with defined benefit occupational pension schemes in organisations that become insolvent.

The CBI had hoped the PPF would apply to schemes that become insolvent only after 2005 when the levy takes affect. The government has confirmed that this will not be the case.

The employers’ group had also lobbied for the PPF levy to be shared between employers and pension scheme members giving employers the ability to pass on the non-risk based amount of the levy to all scheme members where appropriate.

The CBI remain concerned, however, that the government will not act as guarantor of last resort warning this could place an open-ended liability on many firms with defined benefit provision.

John Cridland, CBI Deputy Director-General, said:

“The Bill was supposed to restore confidence in pensions, but as far as employers are concerned it is a major missed opportunity. The government has rightly sought to address the needs of scheme members, but it has offered little to meet the equally legitimate needs of employers.

“Employers have got more concerned as the Bill has travelled through the House and the government has added extra costs onto companies. Amendments made late in the day introduce a whole new cost that firms did not know they would have to bear.”

Cridland further criticised the Pension Protection Fund for being ‘unnecessarily burdensome, complex and confusing.’