Government must up FAS funding - EXCLUSIVE

An exclusive survey by Professional Pensions shows 65pc of scheme managers believe such a move would compensate scheme wind-up victims more fully and begin restoring confidence in the UK occupational pensions industry.

However 33pc of PP's panel of 100 top scheme managers said the government should not fund the FAS to PPF levels and 2pc said they were unsure.

One manager said: "Too many people forget, when they suggest 'the government' should pay for things, that the government does not have any money of its own; it only has what it steals from taxpayers!"

Another added: "This will bring more strain on the fund and result in higher premiums for the few remaining schemes."
The government has, so far, refused to increase FAS payments to PPF levels. Last month, it voted down a "lifeboat fund" amendment to the Pensions Bill - legislation that would have meant FAS payments were increased to Pension Protection Fund levels through the use of unclaimed assets.

Pensions minister Mike O'Brien told the Commons: "Many members of both Houses believe more help should be made available, even if it should come from the taxpayer.

"We have already significantly extended the Financial Assistance Scheme, and we have amended the Bill to get more money to more people immediately after it is enacted - it increases the interim payments from 60pc to 80pc."

O'Brien announced a commitment to match extra funds that the review identifies with "the goal of moving towards 90pc of expected core pension for all recipients".

He added: "Those extra funds will be based on the amount of assets remaining in schemes. Trustees must continue to act in their members' best interests, but we hope they will now take the view that those interests might not be served by expending scheme assets on annuities.

"The government will match the extra funds the Young review identifies as and when they are released by trustees, and we expect that to be achieved as quickly as possible.

"We will write to trustees of the schemes concerned later this week to explain our proposals in more detail and to urge them to co-operate with us in getting a better outcome for all members."


This month's question

Should trustees carry out their own covenant assessments instead of paying external advisers for the service?


The PP100 Panellists are:

Aberdeen City Council Pension Fund - Gail Lindsay
Accenture Pension Plan - Yvonne Pearce
Akzo Nobel (CPS) Pension Scheme - Matthew Trueblood
Alliance and Leicester Pension Scheme - Robert Tyrrell
AMEC Staff Pension Scheme - Garry Lloyd
Arcadia Group Pension Scheme & Senior Executives Pension Scheme - Jayne Cookson
Associated British Foods Pension Scheme - Derek Yarrow
AstraZeneca Pension Fund - Nicki Mortimer
Aviva Staff Pension Scheme - Karen Jones
Axa Group Pension Scheme - David Oversby Powell
BAA Pension Scheme - Eric Hunt
Bedfordshire County Council Pension Fund - Geoff Reader
Berkshire Pension Fund - Nick Greenwood
BMW (UK) Operations Pension Scheme - Chris Wood
BOC Pension Scheme & BOC Retirement Savings Plan - Stephen Pegg
Britannia Building Society Pension Scheme - John Rogers
British Alcan Aluminium Retirement Income & Life Assurance Plan - David Jordan
British Energy Group Pension Scheme - Graeme Robertson
BT Pension Scheme & Retirement Plan - Kevin O’Boyle
Cable and Wireless Superannuation Fund - Peter Hampton
Cadbury Schweppes Pension Fund - John Hatchett
Cambridgeshire County Council Pension Fund - Allison Kew
Cardiff County Council Cardiff & Vale of Glamorgan Pension Fund - Richard Bettley
Chevron Texaco UK Pension Plan - Ashley Saunders
Compass Group - Paul Lambert
Co-operative Group Pension Fund - Alan Murphy
Cornwall County Council Pension Fund - Calvin Matthews
Deutsche Asset Management (UK) Scheme and Senior Group Scheme - Wayne Jury
Diamond Trading Company - Shola Salako
Dundee City Council Tayside Superannuation Funds - Sandy Flight
Durham County Council Superannuation Fund - Nick Orton
E. ON UK Electricity Supply Scheme & M.E. Scheme - Adrian Harris
EDF Energy Electricity Supply Pension Scheme - Ian Baines
Electricity Supply Pension Scheme - Richard Barlow
Essex County Council Pension Fund - Martin Quinn
Exel Retirement Plan - Ann Harrison
Fenner Pension Scheme - David Sykes
First Group Pension Schemes - Ian Robertson
Greater Manchester Pension Fund - Peter Morris
Halifax Retirement Fund - Robert Burnett
Hampshire County Council Pension Fund - Dave Wilson
Hertfordshire County Council Pension Fund - Nicola Webb
IMI Pension Fund - Peter Flanagan
Invensys Pension Schemes - Nigel Casson
John Lewis Partnership Pension Trust - Mervyn Harvey
Kingfisher Pension Scheme and Retirement Trust - Colin Hately
Kodak Pension Plan - Alan Watson
Lafarge UK Pension Plan - Paul Siggers
Land Rover Pension Scheme - Graham Squires
Legal & General Group UK Pension + Assurance Fund - Lisa Shufflebottom
Leicestershire County Council Pension Fund - Gary Featherstone
Liverpool Victoria Friendly Society Staff Pension Scheme - Mike Acred
London Borough of Lewisham Superannuation Fund - Mike Dobson
London Pensions Fund Authority - Mike Allen
Marks & Spencer Pension Scheme - Lynn Collins
Merchant Navy Officers Pension Fund - Linda Corbett
Middlesbrough Teesside Pension Fund - Mike Hopwood
Nestle (UK) Pension Fund - Julie Richards
Network Rail Pension Scheme - Chris Hannon
Nortel Networks UK Pension Plan - Louise Hammond
Northern Foods Pension Scheme - Peter Croskin
Northumberland County Council Pension Fund - Kevin Gregson
Pearl Group Pension Scheme - Denise Bellinger
Philips Pension Fund - Adrian Holmes
Plumbing and Mechanical Services Industry Pension Scheme - Robert Burgon
Prudential Staff Pension Scheme - Andrew Parncutt
Railways Pension Scheme - Michael Goy
Reckitt Benckiser Pension Fund - Tim Wood
Rexam Pension Plan - Paul Reynolds
Rolls Royce Pension Schemes - John Champion
Royal Bank of Scotland Group Pension Fund - Peter Hurcombe
Scottish & Southern Energy Scottish Hydro-Electric Scheme - Martin MacKenzie
Scottish Power Pensions Scheme - Paul Mulhern
Scottish Widows’ Retirement Benefit Scheme - Rod Cummins
Sears Retail Pension Scheme - Gary Branston
Staffordshire County Council Pension Fund - Melanie Stokes
Standard Chartered Pension Fund & Retirement Investment Scheme - Mark Fox
Standard Life Assurance Co. Staff Pension Fund - Brian Beveridge
Strathclyde Pension Fund - Richard McIndoe
The Environment Agency Pensions Active and Closed Funds - Howard Pearce
The Pensions Trust - Karen Parry
The Shipbuilding Industries Pension Scheme - Elaine Darroch
The Weir Group - Barbara Mungall
Thorn Pension Fund - Keith Rayner
Torfaen Pension Fund - Graeme Russell
Total UK Pension Plan - Lester Farrant
Tyne & Wear Pension Fund - Stephen Moore
Unilever UK Pension Fund - Nigel Biggs
Uniq - Helen Whitbread
Vauxhall Motors Pension Plan - Andrew McGaw
Warwickshire Pension Fund - Phil Triggs
West Midlands Pension Fund - Mike Woodall
Western Power Distribution Pension Scheme - Paul Martin
WH Smith Pension Funds - Martin Ashford
Willis Group Services Willis Pension Scheme - Richard Bostock
Wm Morrisons Penson Scheme - Graham Sutch
Woolworths Group Pensions Scheme - Elisabeth Browning
Worcestershire Country Council Pension Fund - Richard Peregrine
WS Atkins Staff Retirement Benefits Plan - Kevin Geeves