My honourable friend the Minister of State for Pensions Reform (Mike O’Brien) has made the following Statement.
The review of pension scheme assets led by Andrew Young published its interim findings yesterday on 16 July.
The review team has worked hard to gather data and engage with stakeholders and I am grateful for its efforts and the co-operation of those who have contributed. The interim findings represent a significant improvement on our understanding of the circumstances of failed pension schemes and provide us with an evidence base on which to build policy in the future.
The assets review has made considerable progress in identifying the value of assets remaining in pension schemes that qualify for FAS and has stated that the current process of annuitisation on a scheme-by-scheme basis may not offer the best use of these assets. It concludes that it is probable that additional value for money could be secured through a number of different methods and the team will focus on investigating the feasibility of these options before it delivers its final conclusions later in the year. I welcome these interim findings and am hopeful that the work that the review team is to continue over the summer will enable us to increase the value of assistance that FAS is able to offer without further calls on public funds.
The potential for any increase will, of course, depend on the value of assets available. While it is too early to say with any certainty that the review will lead to a means of improving FAS above the promised 80 per cent level (subject to the cap), it is hopeful that this is the case. In the mean time, the Government’s position has always been (and remains) that trustees must act in the best interests of their members, but trustees may wish to take into account the effect that the decisions that they take about winding up their scheme may have on the amount of assets potentially available to increase assistance levels.
It is important that trustees continue with the processes of wind-up, including data cleansing and determination of asset share. They should also continue to pay interim pensions to members as they reach normal retirement age and co-operate with the Financial Assistance Scheme operational unit to ensure initial payments can be made from age 65.