24 July 2006 - FAS regulations and operational review findings published
Draft regulations for the extension of the Financial Assistance Scheme (FAS) were published for consultation today alongside findings of a review on how payments can be made faster.
The Government announced an extension of the FAS eligibility in May to include people within 15 years of their occupational pension scheme’s normal retirement age.
The draft regulations confirm a cut-off date of December 31, this year, for qualifying insolvency events for schemes hoping to qualify for FAS. The regulations also include proposals to allow pension schemes where a sponsoring employer has undergone certain insolvency events overseas to be treated in the same way as those in the UK.
The consultation on the regulations will last for eight weeks, beginning today.
Minister for Pensions Reform James Purnell has also announced the outcome of a review of the administration of the scheme as part of a drive to speed up payments.
James Purnell said:
“We understand how difficult it has been for people who lost pensions as a result of their employer going bust. That is why we are extending the FAS with a commitment of more than £2bn over its lifetime - providing help for about 40,000 people.
“I also welcome the findings of the FAS review published today because I understand people’s frustration that payments have not been made more quickly.
“The findings will be implemented as a matter of urgency, and I expect the number of payments being made to increase significantly in coming months.
“The review concluded that to speed up payments, a different skill set and a revised approach to gathering data are required.
“The skills required to improve these activities exist in the private sector and the Pension Protection Fund. DWP will examine options to bring these skills to the operation as quickly as possible. A number of management and efficiency changes will also need to be made.”
The review concluded that in the longer term responsibility for making FAS payments should move to the Pension Service which already pays the state pension and other benefits to millions of people.
Notes To Editors
- The FAS provides assistance to members of qualifying schemes which started to wind up, under-funded, between 1 January, 1997, and 5 April, 2005, and the sponsoring employer is insolvent.
- People within 15 years of their scheme retirement age, on 14 May, 2004, may be eligible for payments. Before the extension only those within three years of their scheme retirement age were considered.
- When the FAS was first announced in May 2004, the Government committed £400 million in cash terms over 20 years. Ministers announced a further £1.9bn, bringing the total funding to £2.3bn, in May, this year.
- The administrative review and the consultation document on the draft regulations can be viewed on the DWP website at www.dwp.gov.uk/lifeevent/penret/penreform/fas/
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