DWP promises financial assistance for lost pensions
Published on : 18/07/2007
Start here..
Compare all energy suppliers
9 out 10 can save money!
The government has announced that it will match any funds provided by the Assets Review for people who have lost their pensions.
Minister for pensions reform Mike O'Brien made the pledge after the interim findings of the assets review were published this Monday. It stated that there are £1.7 billion of assets in occupational pension schemes that qualify for help from the Financial Assistance Scheme (FAS).
It further stated that the current practice, whereby each scheme purchases an annuity for its members, which is then topped up by the government, is not necessarily the best use of these assets.
"The government believes that the cost of extending the FAS towards 90 per cent can now be met by making better use of the assets remaining in pension schemes, matched by a further contribution from government," Mr O'Brien said.
"We will need the cooperation of every pension scheme to get there.
"We are committing today to match the extra funds that the review identifies with a goal of moving towards 90 per cent of expected core pension for all recipients.
"Those extra funds will be based on the amount of assets remaining in schemes. Trustees must continue to act in their members' best interests, but we hope they will now take the view that those interests may not be served by expending scheme assets on annuities."
The government recently defeated amendments to a bill that would have forced it to do more to help out people who have lost pension funds.
