The Pensions Bill is to be amended to ensure that scheme wind-up victims who fell outside the scope of both the Financial Assistance Scheme (FAS) and the Pension Protection Fund (PPF) will qualify for help.
Such victims were members of schemes which began winding-up after the FAS qualification cut-off date of April 5, 2005, but they were not eligible for the PPF because the sponsoring employer became insolvent before the PPF came into existence on April 6, 2005. The Pensions Bill will extend the FAS to provide help for these people.
In addition, following intense pressure from industry bodies including the National Association of Pension Funds and the Association of British Insurers, the Government has announced that existing methods of calculating pay are to be permitted for new personal account contributions.
The Government’s original plans provided that all pay, inclusive of overtime and bonuses, would count towards working out the pay band within which earnings must be contributed to the new personal accounts. Various industry bodies warned that most current schemes do not include fluctuating pay elements such as bonuses and commission and therefore companies would be forced into making cumbersome changes in light of the proposed rules.