Ros Altmann, independent pensions consultant and a former government adviser, hit out at the DWP for claiming in a press release that the FAS would pay out “at least 90%” of benefits accrued when a scheme was wound up.
Altmann claimed the 90% was a maximum for deferred members, and that many would get less than 90% of benefits in compensation. However, pensions minister Angela Eagle maintained the FAS amendments would allow claimants to win back between 90% and 100% of their pension entitlement.
Eagle said: “I am disappointed by claims that people are being misled. Without the FAS, some workers would have lost their entire pension. These regulations mean it is now possible for FAS to pay more than 90%, ensuring people do not lose out when Government takes-in the assets and liabilities of a pension scheme.”
The initial DWP statement followed the final phase of the FAS passing through parliament, which resulted in the government agreeing to pay a total of Ł3.5bn in compensation to 150,000 people whose schemes had been wound up between January 1 1997 and April 6 2005.
The FAS’s successor, the Pension Protection Fund, currently guarantees to pay up to 90% of an individual’s accrued pension for deferred members and 100% for retired members of schemes wound up from April 7 2005.
