06 September 2007 – Pension schemes with solvent employers urged to contact FAS review
The team working on the Financial Assistance Scheme (FAS) Assets Review has issued a final call to trustees of final salary pension schemes, which have wound up under funded and still have a solvent employer, to come forward.
One facet of the review, led by Andrew Young, is to investigate the circumstances of winding up schemes with solvent employers and review their potential for inclusion in the FAS.
The Government has already said it will extend the FAS to include schemes with 'compromise agreements' between trustees and solvent employers. This will pick up schemes where trustees have agreed to accept less money than they are owed on behalf of members to avoid forcing the employer into insolvency.
The Assets Review was further asked to consider the position of all other schemes which claim they are in a closely analogous position to schemes with compromise agreements.
Andrew Young said: “We want schemes with a solvent employer to have had the opportunity to provide us with information. The review’s final report is due before the end of the year so I urge them to get in touch urgently.
“The review has received a number of helpful representations in the last few months – but we believe there may still be schemes out there that haven’t come forward.
“We’re keen to get a greater understanding of these schemes’ circumstances to help us make clear recommendations on their suitability for inclusion in the FAS.”
Notes to Editors
- Trustees of schemes which began wind-up between January 1, 1997, and 5 April 5, 2005, and are underfunded but not currently eligible for FAS because the employer is still solvent, and no compromise agreement had been made, are urged to contact the review. Details should be sent to adelphi.fas-review@dwp.gsi.gov.uk
- The review is considering whether there is any reason these solvent employers should not be expected to meet their pension commitments, and whether their pension scheme members should be brought under the scope of the FAS which would provide them 80 per cent of their core pension, subject to a £26,000 a year cap.
- The review team has issued requests for information to over 300 schemes known to the FAS operational unit, mainly those that failed to pursue their FAS application or that failed FAS qualification.
- The review was announced in March 2007. It is looking at whether better use can be made of the assets in collapsed FAS qualifying schemes in order to increase FAS assistance further. The review published its interim findings in July, and will publish its final report later this year. The Government has said that it will match any additional funds generated by the review in order to increase FAS assistance towards 90 per cent of core pension.
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