Government extends assistance to failed pension scheme members
The Department for Work and Pensions (DWP) has announced an assistance package for up to 140,000 people who lost out when their employer-sponsored pension schemes collapsed.
Those affected will be able to secure 90% 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. Up to 11,000 scheme members from qualifying companies that are still solvent, will also now have access to assistance.
As a result of the announcement, the total Government commitment has increased to £12.5bn in cash terms, or £2.9bn in net present value terms. Previously, it had pledged £8.6bn in cash terms or £2bn in net present value through the Financial Assistance Scheme (FAS).
Secretary of state for work and pensions Peter Hain said: “All those who lost their pensions had done the right thing by saving for later life. They played by the rules, only to see their pension savings disappear through no fault of their own.”
Joanne Segars, chief executive of the National Association of Pension Funds, said: “The welcome resolution of this long-standing issue will start the process of re-building confidence in the security and value of workplace pensions. This must be a priority for the government and the pensions industry from 2008 onwards.
“The Government must now get on with the job of paying the money due to these pensioners as soon as possible.”