UK - Ministers have been told to find extra funding for the Financial Assistance Scheme for wind-up victims and not turn to the industry for cash.
Feedback from consultation with leading pension professionals shows that key elements of the £400m rescue package still need to be resolved before the industry will back the scheme.
Pensions ombudsman David Laverick (pictured); Society of Pensions Consultants president Robert Birmingham; chief executive of the pensions advisory service, OPAS, Malcolm McLean; and Association of Consulting Actuaries chairman Adrian Waddingham were among those raising concerns.
At the consultation, the department for work and pensions was urged to explore the use of unclaimed assets to boost funding and warned that £400m was not enough to provide full restoration of pension rights to members who had lost out.
Attendees said that while the industry generally supported the FAS, it should not make a direct financial contribution, and it was the government’s responsibility to provide the funding. Attendees also recommended:
- Limiting assistance to members who have suffered the most substantial losses.- Focusing on individual rather than scheme eligibility.- Considering underfunded schemes which wound-up prior to April 1997, and where a compromise agreement had been reached.- Implementing an upper level benefit cap.
The DWP said the consultation event was productive and work was well under way on the fine detail of the scheme.
But with an implementation date for the legislative framework set for spring 2005, the DWP has yet to confirm who will be eligible, what assistance will be offered, how the scheme will be funded and how claims will be made.
The DWP was also urged to ensure the FAS had an administration system which was both simple and cheap to maximise the funds available for assistance.
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