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Scottish Life claims victory on assistance scheme
Scottish Life said that its lobbying has prompted the Department for Works & Pensions to act on claims the cost of the Financial Assistance Scheme (FAS) could be too much for small schemes.
The firm had highlighted costs could be disproportionately big for small pension schemes and requiring them to go through the formal process could result in "material loss of value for members".
Stuart Cowan, FAS expert at Scottish Life, said it was the only one of 42 respondents to the consultation to have highlighted the issue, adding it was more expensive than buying out of members' benefits with FAS topping up assistance for members.
Accordingly, the Department for Works & Pensions has instructed the scheme to be more flexible in applying its processes.
Mr Cowan said: "We welcome the flexibility the DWP will now introduce and we are looking forward to working with trustees and the FAS to obtain the best possible outcome for each scheme."
The new flexibility will allow schemes to annuitise where it can be demonstrated that there would be a cost saving relative to transferring.
It will also benefit trustees of small schemes by reducing complexity, time and costs, Mr Cowan said.
Members of small schemes stand to benefit from a faster process and reduced costs, he added.