The Government plans to amend legislation so that pension schemes that failed before the Pension Protection Fund was established are entitled to receive compensation.
A Department for Work and Pensions consultation, launched last week, reveals plans to extend the qualifying conditions of the financial assistance scheme to allow members of failed schemes, such as the George and Harding pension scheme, to be covered by the regulations.
The revised conditions mean schemes that have been bought out by a company that does not meet the Government’s definition of an “employer” will qualify for assistance, provided the connection between the scheme and the last statutory employer was severed before June 10.
The DWP has also tried to simplify the FAS regulations “to assist readers’ understanding of the legislation”.
Pensions minister Steve Webb says: “It is unfair that George and Harding scheme members fell outside the pension protection regime. That is why we are taking action to change the FAS rules and ensure that these people get the help they need.”
Saga director general Ros Altmann has led a campaign on behalf of members of the George and Harding pension scheme. She says many other schemes could have been at similar risk if the pensions minister had failed to act.
She says: “The George and Harding scheme was the first to be affected by this loophole but experts warned that many others could be similarly at risk. I am pleased the Government has listened to the pleas on behalf of scheme members who were assured their pensions had been protected by UK law and suddenly discovered that protection was not there. I hope these new measures will restore the much needed protection to UK pension schemes.”