4 April 2005 - FAS regulations published for consultation
Draft regulations for the Government’s £400million Financial Assistance Scheme (FAS) are being published today for consultation, announced the Minister for Pensions, Malcolm Wicks.
The regulations give details of how the Financial Assistance Scheme, which was established in the Pensions Act 2004 to help some of those people who have lost out significantly due to their pension scheme winding up underfunded, could operate.
Malcolm Wicks said:
“Last month we announced that workers in eligible schemes closest to retirement, and therefore in the most desperate position, would see their pension benefits topped up to 80% of their core benefits.
“We are now pleased to publish these draft regulations and fulfil our commitment that there would be an opportunity for public scrutiny prior to the legislation being finalised. The FAS will be a lifeline for thousands of people across the country so it’s essential we get it right.
“Today we have taken another important step towards establishing this crucial scheme and ensuring we have a body in place as soon as possible which can guarantee the money gets to those who need it most.”
The regulations have been drafted following a wide informal consultation, including meetings and discussions with affected scheme members and their families, trade unions, business organisations and representatives from the pensions industry. Pensions professionals have also assisted with the development of the regulations, providing advice on how the scheme might be run, and information on affected pension schemes.
Malcolm Wicks continued:
“We have always been committed to getting payments underway as quickly as possible in recognition of the plight faced by thousands of pensioners in the UK who have seen their occupational pensions disappear as their employers collapsed.
“We are especially conscious of those eligible pensioners whose situation is complicated further by serious illness and we are looking into how payments can be made to these people speedily. We are also exploring whether we might be able to fast track payments to people who are already 65, and putting in place arrangements to ensure those reaching that age start receiving FAS payments as soon as possible after their 65th birthday.
“Payments will be backdated to the date we announced the Financial Assistance Scheme (14th May 2004) or the recipient’s 65th birthday, whichever is the later. These are likely to be in the form of a lump sum.
“The regulations already make provision for surviving spouses of scheme members who were within 3 years of their scheme pension age on 14 May 2004 – or who would have been had they not died. The good news is that these people will be eligible to receive payments from the date of the death of the member, regardless of the survivor’s age. The FAS will provide support at 50% of the member’s level of assistance.”
The consultation period will last for six weeks, beginning today and ending on the 16th May 2005.
Notes for editors
- Details of the consultation can be found on the website at www.dwp.gov.uk/consultations/2005/index.asp
- The Financial Assistance Scheme was part of the Pensions Act which has received Royal Assent on 19th November and can be viewed at: http://www.hmso.gov.uk/acts/acts2004/20040035.htm#aofs
- Further details on the Financial Assistance Scheme can be found at www.dwp.gov.uk/fas/
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