Background to the report
The UK Atomic Energy Authority (UKAEA) is the government body responsible for research into nuclear fusion and related technologies. It offers a defined benefit pension scheme, which provides a guaranteed income to members in retirement based on how many years they have worked and the salary they have earned.Jump to downloads
AEA Technology (AEAT) was formed in 1989 as the commercial arm of UKAEA, and later privatised in 1996. Employees who were transferred to AEAT joined the company’s new pension scheme and had several options for what to do with the pension benefits already accrued in UKAEA. This included a special transfer offer to move their accrued pension to a closed section of the AEAT scheme, which would have equivalent benefits. This option was taken by nearly 90% of eligible members.
In 2012, AEAT went into administration and the pension scheme subsequently entered the Pension Protection Fund (PPF), a statutory compensation scheme designed to protect members of a defined benefit pension scheme where the sponsoring employer has become insolvent. However, the compensation is typically lower than the original pension benefits. Many pension scheme members now have lower pension benefits than they would have had if they had kept their accrued benefits in UKAEA’s public sector scheme.
Since then, scheme members have raised concerns with various parts of government – including departments, regulators and ombudsman services – about information provided to employees in 1996 which informed their decision to transfer their pensions, and about the impact of the company’s administration in 2012. There have also been two parliamentary debates on the subject, in 2015 and 2016, where members of Parliament raised concerns on behalf of the pension scheme members.
Scope of the report
The report is primarily based on publicly available information and is also informed by documentation provided to us by scheme members and public bodies. It sets out the facts around:
- what the privatisation of AEAT in 1996 meant for its pension scheme, including the options and information available to scheme members
- the subsequent changes to the AEAT pension scheme following the company going into administration in 2012 and the impact this had on
- the actions taken by scheme members to make complaints to, and seek redress from, government, and the responses they have received
The report does not seek to examine and report on value for money, nor does it seek to examine the merits of actuarial decisions. The report also does not examine the adequacy of AEAT’s privatisation or pension settlement.
- Report - Pensions transferred to AEA Technology when it was privatised (.pdf — 296 KB)
- Summary - Pensions transferred to AEA Technology when it was privatised (.pdf — 112 KB)
- ePub - Pensions transferred to AEA Technology when it was privatised (.epub — 1 MB)
- ISBN: 9 781786 044761 [Buy a hard copy of this report]
- HC: HC 1169 2022-23
View press release (3 Mar 2023)