Reeves Pension Reform Risks Maxwell Style Scandal Say Victims

Chancellor Rachel Reeves’s proposal to allow companies increased access to surpluses within defined benefit pension schemes has drawn severe criticism from representatives of pensioners affected by the infamous Robert Maxwell scandal. The Association of Mirror Pensioners warns that relaxing regulations on gold plated pensions may expose millions to significant risks, accusing the government of putting tax revenues ahead of saver protection.

The reforms aim to permit companies running defined benefit pensions, which guarantee retirees an income, to unlock surplus funds accumulated largely due to higher interest rates. The Treasury estimates that around three quarters of affected schemes now hold a collective surplus of £160 billion. Under these plans, any extracted surplus would be taxed at 25 percent, which the Treasury projects would net £3 billion in revenue over the next decade.

The Association of Mirror Pensioners, formed after Robert Maxwell illegally diverted £450 million from employee pension funds to prop up his business interests, has submitted a forceful letter of objection to Parliament. The group argues that current proposals could enable history to repeat itself, undermining safeguards introduced in the wake of the Maxwell scandal. These protections were designed to prevent businesses from using pension funds for purposes unrelated to safeguarding member benefits.

The Association contends that the changes could leave pensioners vulnerable, especially given the financial challenges currently faced by Reach, the successor to Maxwell’s Mirror Group. The association’s chair, Rosemary Cook, warns that new management or ownership could put further pressure on trustees to release pension surpluses, under the pretext of serving scheme members’ interests. With declining revenues across the print sector, pressure to access pension assets may intensify.

The group’s submission accuses the government of prioritising fiscal gain over pension security, noting that the planned tax on surplus extractions would create a substantial revenue stream at the potential expense of retirees. The letter stresses the importance of robust regulation and experienced oversight to ensure that future generations are not left facing deficits caused by short term decisions or corporate failures.

Strict rules introduced after the Maxwell case provided a measure of security for pension scheme members. Weakening these safeguards, the Association insists, could once again jeopardise the retirement prospects of millions. The government and Reach plc were approached for comment as debate continues regarding the future direction of UK pension policy.