In the wake of last week's march by thousands of workers through the capital, outraged at losing pension entitlements when their employers declared bankruptcy, the government has announced new measures to help protect pension scheme members.

Currently, employees paying into a company pension scheme are treated as creditors if it goes into receivership. Angry workers have called on the government to implement a government-sponsored insurance system to act as a safety net for workers who, in some case, have paid in contributions all their working lives.

Among proposals set out by the government today are: a Pensions Protection Fund – for defined benefit pensions in the UK, protecting pension rights accrued when a company goes bust; Full Buy Out - ensuring that where a solvent company chooses to wind up its scheme it should fully buy out members' benefits; New Pensions Regulator - with new activity targeted on badly run and high-risk schemes putting consumers first and ensuring secure schemes continue without unnecessary regulatory burden.

Secretary of State for Work and Pensions, Andrew Smith, said that it was now "time for action" on the issue.

Mr Smith said: "We want to make it easier for people to save and easier for companies to run good pensions schemes. I've taken a hard look at all the proposals made following the Green Paper and struck a balance between reducing costs on schemes while also providing new protection for people who work hard to build up pension rights.

"All partners must now rise to the challenge and work together to build pension provision in the UK."

The proposals outlined today are the first steps the government is taking following the consultation on the Pensions Green Paper which was published last December.

(GMcG)