The draft Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010, which were laid before Parliament on 20 January (but not published on the OPSI website until the 26th and then replaced by a new version on 8 February), include provision for the assets remaining in relevant FAS-qualifying schemes to transfer to government. Publication follows a consultation last August (see Aries report), to which the Government's official 80-page response has now appeared. About half the 42 respondents to the consultation had been from those directly affected by the policy proposals and their representatives. Among changes in response to concerns raised, the Government has revised its proposals on defined benefit AVCs to allow trustees the option of separately discharging these liabilities prior to the transfer of other scheme assets. The Regs will come into force once each House has formally approved them.

The current draft Regulations complete the changes to the FAS outlined by the Government in its December 2007 announcement (see Aries report). It seems the Government is not going to go any further towards replicating what pension schemes would have provided if schemes had not begun to wind up underfunded.

This is not the end of this phenomenally complicated and expensive project, however. The Government response notes at the end

"As the FAS involves a very complex area of policy, it is likely that further regulations will be required in the future. These will refine the operation of the scheme in light of operational experience."

The draft Regs provide that guidance may be published in relation to the valuations of assets and liabilities of relevant schemes and for individual asset shares to be calculated for scheme beneficiaries. The Government has also prepared guidance on how transferring schemes might deal with the impact of the GMP on the equalisation (between men and women) of members' expected pensions and asset shares ahead of providing data to the FAS scheme manager. A new consultation published yesterday seeks views on draft guidance in these areas.

The Government is also taking this opportunity to consult on related changes to the FAS synthetic buy-out basis that seeks to provide an estimate of the amount of bulk annuity that could have been secured for a cash sum from an insurer. The basis was last reviewed early in 2008.

The closing date for both consultations is 10 March 2010.

Meanwhile, in Parliament yesterday the Minister for Pensions and the Ageing Society (Angela Eagle) announced in a written statement that the Government has concluded as a result of a review of legislation and case law on equalisation that

"where a scheme member has accrued entitlement to a guaranteed minimum pension after May 1990, European law requires that any inequality in scheme rules which results from the legislative provisions governing GMPs should be removed, whether or not a person can show that a comparator exists."

"The Government intend to bring forward amending legislation when Parliamentary time allows. However, in the meantime, it is the Government's opinion that, in order to ensure full compliance with European law, trustees and others should act as if existing domestic legislation requires equalisation in respect of differences resulting from GMPs whether or not real comparators exist."