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Overhaul is an admission of FAS shambles, says Altmann

The Government’s plans to overhaul the structure of the Financial Assistance Scheme are an admission that it is a shambles, says independent pension consultant Dr Ros Altmann.

In draft proposals, the Government has unveiled plans to broaden the FAS’s remit and outsource its running to the private sector.

To date, only 171 pensions schemes have asked for initial payments and just 52 schemes have been assessed. Only 191 members are getting payments from the FAS. Eligibility criteria will be extended to people 15 years from their scheme retirement age as of May 14, 2004. Previously, assistance was only available to people who were within three years of retirement.

The Government also promised an extra £1.9bn funding for the FAS but Altmann says this masks the fact that Chancellor Gordon Brown has yet to set aside any money for it.

Altmann says: “The FAS review is an admission that it is in a complete shambles. You have to remember that Brown has not yet set aside any money and new money will not be made available until around 2007/08. All the money has to go through the DWP at the moment, which is in a complete mess. No wonder money is paid out at such a snail’s pace.”

At the launch of the draft regulations, pensions minister James Purnell said: “I understand people’s frustration that payments have not been made more quickly. The skills required to improve activities exist in the private sector and the Pension Protection Fund.”

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