Director to fight on after losing appeal

But Paul Hughes, who would have had a £66,000 index-linked pension, has vowed to continue his fight along political channels.

“I won’t give up on this and there are other people in the same boat as me who I don’t think will ever give up either,” he said.

“The Conservatives have got a hell of a job to do, but they talk about fairness and responsibility as being key words in governing their philosophy of how they will run the country.”

Hughes had been a finance director of one of the companies in the Heath Group and had been an active member of the defined benefit scheme for more than 20 years.

Following the merger of the Heath Group with the Lambert Fenchurch Group in 2000, Hughes believed the trustees of the pension scheme should have ring-fenced the Heath Group scheme’s assets in accordance with scheme rules.

An actuarial valuation of the scheme in April 1999 showed it to have a surplus on an ongoing basis of £42.2m and on a minimum funding requirement basis of £26.7m.

But in 2005 the scheme entered the PPF assessment period and finally fell into the fund this March.

The current maximum level of compensation from the PPF is £29,749 a year.

“When the scheme entered the fund, I thought the chances of getting a positive determination from the ombudsman was much reduced because it would be very embarrassing for the PPF,” Hughes said.

“If a number of people came [to the ombudsman] behind me it would be quite reasonable to ask why the hell this was not sorted out before the thing went into the PPF.”

In a letter explaining his decision, Tony King, the pensions ombudsman, wrote: “Although I understand the reasons why you suggest [the assets should have been ring-fenced] and that this may have served the companies’ interests, it does not follow that the use of one option which was open to the trustees rather than another amounted to a breach of trust.”

Hughes has made contact with David Amess, his local MP, and hopes to work with people in similar situations who have had their pension dramatically reduced when their schemes entered the PPF.

He added: “It’s just disappointing, having spent five years battling with this through all the different channels, to not even have the allegations discussed or dealt with.”