Pensions safety net to include more firms

Members of a group of collapsed pension schemes that fall outside the scope of the Financial Assistance Scheme and Pension Protection Fund are to become eligible for financial help, the department for work and pensions has announced.

An amendment to the Pensions Bill will enable members of collapsed pension schemes, such as Desmond and Sons in Northern Ireland, to receive assistance from the FAS.

The schemes fall between FAS and PPF because of the unusual timing of their sponsoring employers becoming insolvent, and the schemes winding up.

The schemes began winding up after the FAS qualification cut-off date of 5 April 2005 but not eligible for the PPF because the sponsoring employers became insolvent before the PPF came into existence on 6 April, 2005.

Mike O’Brien, minister for pensions reform, said: “People in schemes such as Desmond and Sons did the right thing and saved for their retirement. So I am delighted that we’re extending FAS assistance to include them.

We expect this to help about 450 people in addition to the 140,000 we’ve already announced will be protected by the scheme.”

Pensions expert Ros Altmann said it had taken almost three years for the scheme to be included but added: “It is good news. They slipped into the Pensions Bill legislation that provision to now include people who did not qualify to get assistance.

“Unfortunately they will not find they will be included until the end of the year because it is primary legislation – not regulation.”