Workers of seven more failed pension plans join PPF, bringing to 120 the number of schemes protected by government

The number of crashed pension funds in the government's lifeboat scheme swelled to 120 today after seven final-salary schemes were admitted.

More than 2,500 former workers at a carpet factory in Lancashire, a car repair firm in London and a leather goods maker in Somerset will be guaranteed retirement incomes after their occupational schemes gained entry to the Pension Protection Fund.

Within the next two years the fund expects another 357 company schemes to be rescued, adding 202,380 members to the 36,799 already protected.

Earlier this week the £4bn fund unveiled plans to increase investments in private equity and corporate bonds to end its reliance on equity markets and increase returns on investments.

The fund has been criticised by those who believe the large increase in crashed schemes will overwhelm its capacity to pay pensions, and it will have to increase levy payments or cut benefits to pensioners.

The PPF was set up in 2005 to rescue schemes of crashed companies following a series of insolvencies that left workers with worthless pension promises. Pension rules forced occupational schemes with large deficits to favour pensioners when a parent company went bust.

About 7,000 solvent final-salary schemes must pay an annual levy of £770m to support PPF pension payments and allow the fund to invest to cover future liabilities.

Pension payments are projected to rocket over the next 20 years as the baby-boomer generation retires. Alan Rubenstein, the chief executive, is under pressure to show the fund can match payments when costs reach their peak in 2030.

Pension experts have also expressed concern that a steep rise in company insolvencies this year could add to the PPF's future funding deficit.

The National Association of Pension Funds, which represents schemes worth more than £800bn, argued today that radical reform of pension accounting rules was needed to prevent companies from closing schemes, often to avoid being pushed into insolvency.

The organisation said it would call a summit to lobby for reforms to the current standard, IAS19, which requires companies to value the assets and liabilities of their pension funds "in a way that both overstates the likely long-term costs of funding the pensions and results in a high degree of volatility appearing on balance sheets".

The International Accounting Standards Board plans to review the standard before the end of next year.

Chairman Lindsay Tomlinson, said: "The standards have contributed to the decline in defined benefit provision over the last 10 years which has seen the number of schemes in the private sector remaining open to new members fall from 86% to 23%, a reduction of two million people.

"Current accounting standards have been very damaging to defined benefit provision, leading many companies to close their schemes. Pension funds are long term institutions but today's accounting standards fail to reflect this," he said.

Mark Serwotka's PCS avoids tackling the inequality that sees baby boomers stay rich at the expense of future generations

When Mark Serwotka, the leader of the PCS civil service union, calls for bankers to be denied contractual pay and bonus hikes in the same way the government intends to cut redundancy and pension rights for civil servants, he has a point. Last year, thousands of bankers received bonuses despite the near-collapse of their institutions because lawyers trooped into the Treasury to announce that a rash of lawsuits would immediately hit the courts if the government banned contractually agreed bonuses.

Of course, ministers bottled a legitimate challenge to the City and its bloated, greedy practices. The gauntlet was there to pick up. The fight was necessary. It didn't happen. Bankers got away with their illegitimate, ill-gotten gains.

This year, we were blackmailed with the threat that bankers would decamp to foreign lands if their pay was restricted. Suffice to say, we will never know. They were handsomely paid, by and large, and few made the trip to Switzerland.

Yet Serwotka, who is leading about 250,000 civil servants on strike today as yesterday, knows that two wrongs don't make a right and his defence of civil service benefits is almost as ludicrous as the rearguard support put forward by bankers. There are redundancies to be made across the civil service and the terms are excessively generous. A 50-year-old middle-ranking administrator in any department can expect up to three times their salary and a pension for life under the old arrangements. That puts the price of his or her redundancy into the million-pound bracket.

The cost of a pension at 65 is around £100,000 for every £3,500 of retirement income. Add another 15 years of early retirement and a worker on £30,000 who is eligible for a pension of £20,000 can expect almost to double the cost of retirement from £550,000 to £1m.

Nobody in the private sector enjoys redundancy and pension terms this generous, at least no ordinary worker. Although Serwotka claims workers on low incomes will lose out, only workers on more than £30,000 will see redundancy terms cut from a maximum three years' salary to two. Sure, early retirement is over, but that's the case in most jobs now.

Serwotka, then, needs to make an even wider point than the one he makes about bankers. It is the same unspoken reason for Greek public servants taking to the streets. Without doubt, it is the running sore of the last 30 years that has recently swollen to resemble a boil. It is the gross inequality across society that rewards not only bankers but also a large minority of the property-owning classes who have secured for themselves a disproportionate amount of wealth, much of it in the form of IOUs that must be honoured by future generations, whether with reference to property prices, pension values or services like long-term care. They include MPs, most company directors and, bizarrely, trade union leaders, among the baby-boomer generation who have paid themselves generously, bought assets in the boom and awarded themselves guaranteed pensions.

Civil servants had guaranteed jobs and pensions. Having given up the former, they are loath to surrender the latter to a group, however ill-defined, that still hang on to their generous pay, homes and sundry benefits.

Unless trade unions tackle the wider inequality, they will continue to lose the argument and strikes will be merely symbolic. Until now, they have represented the narrow interests of their mainly older membership. Even Serwotka argues it is the new entrants to the civil service who should bear the brunt of cuts, while his existing members are protected. Such sectional representation wins elections (as Serwotka has recently done inside the PCS), but fails future members and society as a whole.

NatWest Life policy application needed a check-up of its own

In 2007, I took out level term insurance with a NatWest Life personal pension. It cost £75 a month to cover my £270,000 mortgage. My financial adviser later questioned this. He knew my medical history and was surprised the premiums were so low.

I had not been asked about my health when I signed the NatWest form, but I had a procedure on my heart 15 years ago, have severe palpitations and have been on antidepressants for 10 years. I asked NatWest why I had been sold a policy which was probably null and void but am getting nowhere. I have cancelled the direct debit until this is resolved. EM, London

First, I urged you to reinstate the direct debit, to avoid jeopardising the policy. As you bought it before the rules changed in mid-2007, you get tax relief on the premiums. NatWest reinstated it.

Meanwhile, both NatWest and its owner, Royal Bank of Scotland, were investigating your complaint. The original application showed the answer "no" to all questions about your medical history, but the bank cannot discover how this happened. NatWest said it had been chasing your GP for a report on your health, without which it could not make a decision. Two weeks later, RBS rejected your complaint.

I suggested you put pressure on the GP to produce the vital information, which finally he did. NatWest decided you can keep the policy, with the pre-existing conditions noted, at the same premiums as you have been paying.

• Email Margaret Dibben at your.problems@observer.co.uk or write to Margaret Dibben, Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU and include a telephone number. Do not enclose SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.

NatWest Life policy application needed a check-up of its own

In 2007, I took out level term insurance with a NatWest Life personal pension. It cost £75 a month to cover my £270,000 mortgage. My financial adviser later questioned this. He knew my medical history and was surprised the premiums were so low.

I had not been asked about my health when I signed the NatWest form, but I had a procedure on my heart 15 years ago, have severe palpitations and have been on antidepressants for 10 years. I asked NatWest why I had been sold a policy which was probably null and void but am getting nowhere. I have cancelled the direct debit until this is resolved. EM, London

First, I urged you to reinstate the direct debit, to avoid jeopardising the policy. As you bought it before the rules changed in mid-2007, you get tax relief on the premiums. NatWest reinstated it.

Meanwhile, both NatWest and its owner, Royal Bank of Scotland, were investigating your complaint. The original application showed the answer "no" to all questions about your medical history, but the bank cannot discover how this happened. NatWest said it had been chasing your GP for a report on your health, without which it could not make a decision. Two weeks later, RBS rejected your complaint.

I suggested you put pressure on the GP to produce the vital information, which finally he did. NatWest decided you can keep the policy, with the pre-existing conditions noted, at the same premiums as you have been paying.

• Email Margaret Dibben at your.problems@observer.co.uk or write to Margaret Dibben, Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU and include a telephone number. Do not enclose SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.