Department for Work and Pensions
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Fast tracked changes to boost FAS payments
Measures to increase the level of payments by the Financial Assistance Scheme (FAS) are to be fast-tracked, Minister for Pensions Reform Mike O'Brien announced today.
The Government has today published draft regulations to increase FAS payments to 90 per cent from people's normal retirement age. In order to make enhanced payments as quickly as possible, the written consultation period on the draft regulations is to be limited to two weeks, rather than the full 12 week period that might be appropriate in other circumstances. There is cross-party and stakeholder support for this move.
Subject to the Parliamentary timetable, the Government aims to have the Regulations approved in May before the Whitsun recess.
Mike O'Brien said:
"The shorter written consultation period will enable the FAS Operational Unit to work with the trustees of the affected schemes to ensure that, from the end of May, they are in a position to start paying qualifying members 90 per cent of their accrued pensions - from their scheme normal retirement age.
"Our aim will be to ensure that all existing cases are reassessed and paid arrears by the end of August.
"Some amendments to the current Pensions Bill and further regulations later this year will be required to bring about all the improvements to the FAS we announced in December.
"But we are determined to start making 90 per cent payments
to as many people as we can, as quickly as we can - the
regulations we're putting forward today represent the best
way of achieving that."
Mr O'Brien also said changes
have been made to the FAS website to provide more detail for
members on the status of their winding up pension scheme.
He
said: "Members can track the progress of their particular
scheme and will be better informed. They'll be able to check
if their scheme's trustees have supplied the FAS unit with
all the information it needs to make the payments, whether data on
members has been processed, and whether payments to qualifying
scheme members are under way.
"If people are approaching retirement age and have concerns about the progress of their scheme towards receiving FAS payments, they can contact the FAS unit for more information on 0845 6019941. The unit will be able to make further enquiries about their case with the trustees of their occupational pension scheme."
Around 4800 members are now being paid compared to 1,000 a year
ago. FAS
estimates that when the proposed new regulations to
pay out from normal retirement age are brought in, a further 5000
people will become eligible for payment.
Notes to Editors
1. The consultation document is available on the Department's website at http://www.dwp.gov.uk/publications/dwp/2008/FinancialAssistanceScheme(MiscellaneousAmendments)Regulations2008.pdf
2. Scheme members can see more detail on the status of their schemes at http://www.dwp.gov.uk/lifeevent/penret/penreform/fas/pension_schemes.asp
3. The Government announced in December that the FAS would be extended so that:
* All scheme members will be guaranteed 90 per cent of their accrued pension at the date their scheme began wind-up. This will be subject to a cap of £26,000, the value of which will be protected.
* Assistance payments derived from pension accrued post-1997 will be increased each year in payment in line with inflation.
* Assistance will be paid from each failed scheme's normal retirement age, subject to a lower age limit of 60.
* People who are unable to work due to ill health will also be able to apply for early access to payments from age 60.
* Members will be able to draw a tax-free lump sum, up to their full lump sum entitlement, if their share of scheme funds allows.
* Help will be extended to members of schemes wound up by qualifying solvent employers.
4. To bring about all these improvements, some amendments the Pensions Bill 2007 will be required, and two further packages of regulations later this year.
Textphone: 020 3267 5145
Website: http://www.dwp.gov.uk
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