A final draft of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (the Regulations) has been laid before Parliament. It amends the current Financial Assistance Scheme Regulations 2005, which allow for payments to be made to, or in respect of, certain members or former members of occupational pension schemes where the liabilities of the scheme to those members are unlikely or unable to be satisfied in full, and the scheme is ineligible for the PPF.
The main thrust of the Regulations is to:
- extend eligibility to the Financial Assistance Scheme (FAS) so that the 80% core assistance (subject to the cap) is available to all qualifying members at age 65 regardless of how far away they were from their scheme pension age on 14 May 2004, rather than the current tapering assistance;
- increase the cap on maximum assistance from £12,000 to £26,000;
- remove the de minimis rule which currently excludes FAS payments of £10 or less per week;
- change the FAS qualifying rules to cover members of schemes that began winding up between 1 January 1997 and 5 April 2005 where a compromise agreement is in place and where enforcing a debt against the employer would have forced the employer into insolvency; and
- allow certain small self-administered schemes to be considered qualifying schemes.
There is no indication of when the new Regulations are expected to come into force. However, it is expected that they will be subject to amendment, as the Government has now announced that the FAS will guarantee qualifying members 90% of their accrued pension at the date their scheme began wind-up.
View the draft regulations