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Pensions: Insolvency

Volume 461: debated on Monday 4 June 2007

To ask the Secretary of State for Work and Pensions what Government funding has been made available for pensioners whose pension funds have been wound up in the last 10 years. (137053)

The Pensions Act 2004 put in place the Financial Assistance Scheme (FAS) which provides support to members of defined benefit occupational pension schemes which started to wind up, underfunded, between 1 January 1997 and 5 April 2005. At that time the Government committed the equivalent of £400 million cash of taxpayers’ money spread over 20 years.

On 25 May 2006, as part of the White Paper, “Security in Retirement: towards a new pension system”, a further £1.9 billion cash was allocated, bringing the total funding to £2.3 billion.

In his Budget speech on 21 March 2007 the Chancellor announced that we now intend to increase total long-term expenditure on the FAS to £8 billion. This equates to more than doubling funding for the scheme in ‘present value’ terms, from £830 million to £1.9 billion and will allow us to further increase the scope of the payments.