30 March 2007
The Secretary of State for Work and Pensions, John Hutton, has
announced a review of pension scheme assets held by insolvent
employers. The review will focus on whether better use could be
made of the remaining assets within the failed pension schemes that
have qualified for Financial Assistance Scheme.
The review will:
1) examine how we make best use of the assets in pension schemes
that are winding up under funded with an insolvent employer;
2) determine if these sources of funding could be used to
increase assistance for affected scheme members;
3) consider any suggestions from interested and concerned
parties.
It will report by the end of the year.
John Hutton said: "The extension of the Financial Assistance
Scheme announced by the Chancellor last week represents a major
increase in the support available to people whose pension schemes
were wound up under funded due to employer insolvency.
"The increase means that all eligible members of affected
pension schemes will get support broadly equivalent to 80 per cent
of their core pension rights up to £26,000 per year.
"We think this is as much as the taxpayer should be asked to
pay.
"However, several alternative methods of funding have been
proposed, in particular the pooling of scheme assets from the
affected schemes. Although these have already been considered, the
Government has agreed to look again at this suggestion, and this is
what the review will do.
"Any additional sources of funding will add to the 80 per cent
already committed from public funds."
The focus of the review will be on whether better use could be
made of the remaining assets within the failed pension schemes that
have qualified for Financial Assistance Scheme. The review will be
conducted by the Department for Work and Pensions and advised by a
panel of technical experts. Due to the complexity of the issues
involved the review will be informed by advice from the Government
Actuary's Department.
