SHEPPEY MP Derek Wyatt has joined forces with a senior Labour MP in a campaign which aims to end the injustice of pension wind-ups.

Mr Wyatt and Frank Field, MP for Birkenhead, are introducing a backbench Bill to ensure that when occupational schemes close, the assets are distributed fairly.

At present when an occupational scheme winds-up, the Pensions Act 1995 offers much greater protection to those members who are already receiving their pension than to those members who are still working for the firm, or have moved to another firm, but are not yet drawing the pension.

The Allied Steel & Wire Company, with plants at Sheerness and Cardiff, went into receivership in July and pension schemes began to be wound up.

Pensioner members of the scheme received their full pension, but workers and those who had transferred to other firms, got just 50 per cent of their pension rights.

Mr Field said: "It is unfair that workers can lose 50 per cent or more of their expected pension rights while pensions in payment receive a high-degree of protection. The Government has rightly recognised this injustice and I hoping that they will work with Derek and I to shape this Bill."

Mr Wyatt commented: "Most of our people thought the occupational pension crisis ended when the Maxwell scams were addressed. Not so.

The new Bill will propose a fairer distribution of assets on the winding-up of a scheme by offering every member of the firm the same level of protection for their particular share of the assets. This will be at no additional cost to occupational schemes.

Meausres in the Pensions (Winding-Up) Bill will include:

* A Government review of the status of pensions-related debt on insolvency. Pensions debt is currently ranked the lowest of all debt when a firm ceases to trade.

* A limit on the fees charged by professional advisers during the winding-up process.

The Bill proposes that fees are limited to the greater of one per cent of the fund's value or a sum determined by the Secretary of State.

Workers such as those at Allied Steel & Wire have suffered losses of about 50 per cent due to the current wind-up rules. Membership of their scheme, as with many other schemes, was originally a condition of employment and members of such final salary schemes are seldom warned of the risks.

* The Bill will therefore suggest that a distribution is made from unattributed assets listed on the Unclaimed Assets Register. Only those assets where the last contact with an owner was before 1900 and where every reasonable effort has been made to locate the rightful owner would be distributed in this way. The proceeds will be used to provide some compensation to those adversely affected by scheme wind-up rules.

* The Bill introduces a levy scheme on occupational pensions to ensure that where an insolvent employer winds-up an underfunded scheme, there are funds available to top the scheme up to a pre-specified funding level.