Hain resigned from the post after his Labour leadership campaign donations were referred to the police by the Electoral Commission.
Purnell returns to the department after a six month stint as culture secretary since Gordon Brown became prime minister last June.
Before then he was pensions minister. He was noted in the industry for entering into a long term blog with Steve Bee, head of pensions strategy at Scottish Life over the effect of means testing on auto-enrolled savings. He is a strong supporter of Personal Accounts.
Hain has had a long and varied career in politics. Born in Kenya and brought up in South Africa, his parents were anti-apartheid activists who were jailed by the government and prevented from working. He became a prominent anti-apartheid activist, chairing the Stop the Tour campaign that disrupted tours by the South African rugby and cricket teams in 1969 and 1970.
Bee says: “Maybe Purnell will be prepared to reopen our battle of the blogs. At least he knows the subject matter, even if he doesn’t understand the issues.”