DWP to extend help for failed pension schemes

The Department for Work and Pensions (DWP) may extend the rules of the Financial Assistance Scheme (FAS) to insure pension schemes exempt from the Pension Protection Fund (PPF).

In a consultation launched on Friday the DWP asked for views on the draft FAS Regulations 2011.

The consultation was a direct response to the PPF exemption of the George and Harding (G&H) pension scheme after its funding collapse in 2009.

G&H members were denied access to the PPF due to a legal technicality, despite the trustees of the scheme having paid levies to the PPF.

The DWP confirmed G&H scheme members would qualify for the FAS under the new rules.

Pensions minister Steve Webb said: "It is unfair G&H scheme members fell outside the pension protection regime.

"That is why we are taking action to change the FAS rules and ensure these people get the help they need."

Ros Altmann, director general of Saga, who has been campaigning on behalf of G&H members since last year, said: "I am so pleased the government has listened to the pleas on behalf of scheme members who were assured their pensions had been protected by UK law and suddenly discovered that protection was not there.

"It has been dreadful for them and the trustees as they faced the prospect of losing much of their pensions even though they were already retired."

The consolidated FAS regulations revise the conditions for entry into the FAS but also add extra conditions in response to the G&H case.

The revised conditions are:

• The scheme will need to have started to wind up in the period from 23 December 2008 to the day before the new FAS Regulations come into force;

• The statutory employer has undergone an insolvency event before 6 April 2005; and

• The connection between the scheme and the statutory employer was lost before 10 June 2011.

The consultation will run until 1 September.