2 December 2004 - New FAS eligibility details announced
Underfunded pension schemes that started winding up between 1 January 1997 and 5 April 2005 when the Pension Protection Fund (PPF) comes in will be potentially eligible for help from the Financial Assistance Scheme (FAS) Pensions Minister, Malcolm Wicks confirmed today.
In a statement to the House of Commons, Mr Wicks said that since the scheme was announced in May, good progress had been made in identifying the scale of what is an extremely complex problem. As a result of the information already gathered on affected schemes and discussions with industry it was clear that the majority of those that had started winding up with significant funding shortfalls did so after January 1997.
Malcolm Wicks said:
“It is important that the Financial Assistance Scheme helps those people who have been worst affected by their pension scheme winding up underfunded. Our research shows that for the majority of people this has been after January 1997.
“The 1 January 1997 start date, alongside the commitment we made last month to provide help for those schemes affected between May 2004 and the start of the PPF next Spring means we are providing help to people who would have otherwise been left to make do on their own.
“All in, this is good news for hard hit individuals in those schemes that have found themselves in difficulty.”
To minimise bureaucracy and maximise payments to those who have lost out the most, Ministers are considering including only those who would expect payments from FAS of £10 a week or more. To ensure that the money is spread fairly, they are also considering a cap on annual pension payments which is expected to be set at a lower level than that for the PPF.
Malcolm Wicks also outlined the next steps of the timetable for FAS saying that he hoped to be in a position to announce what we propose by way of indicative assistance levels to those facing the most urgent difficulties, as well as an indicative list of schemes that are likely to be eligible for assistance if those schemes are subsequently shown to comply with the FAS rules. Draft regulations to introduce the FAS will be published in the Spring to be followed by a formal consultation.
He also reminded trustees of schemes who may be eligible for help via FAS to provide the department with the relevant information by December 10th.
Mr Wicks said:
“In September, we launched a detailed data gathering exercise to identify all potentially eligible schemes. It is important that all scheme trustees and actuaries who think their schemes might be eligible respond as quickly as possible."
Notes for editors
- The Financial Assistance Scheme is part of the Pensions Act that was given Royal Assent on 18th November. It can be found at:
- Details of the Financial Assistance Scheme and how trustees can provide the department with details of their scheme can be found at:
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