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Pensions: Financial Assistance Scheme

Volume 504: debated on Thursday 28 January 2010

To ask the Secretary of State for Work and Pensions if she will take steps to ensure that pensioners who have lost all or a greater part of their pension due to failed occupational pension schemes are fully compensated under the new Financial Assistance Scheme regulations, with particular reference to (a) indexation reflecting that provided by their original schemes and (b) backdating to cover normal retirement age. (313442)

On 17 December 2007, the Government announced a major extension to the Financial Assistance Scheme (FAS). This provided for people to be paid 90 per cent. of their accrued pension, revalued to the date of entitlement, subject to a maximum limit, which is currently £29,386. Payments are made from the member's normal retirement age (subject to a lower age limit of 60 and an upper limit of 65).

Payments based on rights accrued since April 1997 are increased in line with inflation, subject to a 2.5 per cent. cap. This is the same as occupational pension schemes are required to provide by legislation and is also in line with what the Pension Protection Fund provides.

No payments are made for any period before 14 May 2004, when the Financial Assistance Scheme was announced.

The Government believe this is a generous and appropriate final settlement.