The DWP is currently consulting on the draft Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010, which are supposed to complete the extension to the FAS announced on 17 December 2007 (see Aries report ). These regs (the thirteenth set, we believe, governing the FAS) provide for:

• transfer to the Government of remaining assets held by schemes which have qualified for the FAS ;
• no loss of entitlement for those members of schemes who would have received more, if their scheme had continued to wind-up and buy annuities rather than transfer assets, than the FAS would otherwise provide;
• part-payment of FAS assistance as tax-free cash to members who have not yet reached NRA (the lesser of 25% and their share of the scheme assets);
• how individuals taking early retirement should be treated; and
• calculation of survivor entitlements.

At 142 pages, this condoc outdoes even the last mammoth. The length is due in part to a detailed description of the process by which the assets are to be transferred, involving a "preparation period" before the actual "transition period" itself. The proposals are similar to the process for entry to the PPF. The DWP estimates the £28m cost of transfer will be more than recouped by the gain from the taxpayer providing the compensation, rather than insurers.

The consultation closes on 6 October 2009.

Meanwhile, guidance on completing a new version of the FAS application form S1 has also been published. The new S1 covers collection of additional scheme data* required under the last set of regs (The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009 (SI 2009/1851), which came into force in July 2009.

* ie where the FAS OU know that a member is approaching their NRA in the period August 2009 to January 2010; and schemes have members who have already been assessed but additional data is now needed to calculate awards at the new benefit rate.

For trustees of schemes that have qualified for the FAS, an updated Good Practice Guide sets out their roles and responsibilities, as well as those of PPF caseworkers, and explains the reporting requirements. Close collaboration with the PPF caseworker is emphasised as essential.

Other news from the Pension Protection Fund

The PPF last week published the first issue of a new, bimonthly electronic newsletter.

Its current consultation, open until 11 September 2009, covers changes to some of the valuation assumptions relevant to determination of scheme levies and whether a scheme can enter the PPF. The anticipated result is that fewer schemes will enter the PPF as more will be able to pay benefits greater than PPF compensation levels. Although the changes are to come into effect from 31 October 2009, any impact on scheme levies will not be manifest until at least the year commencing April 2011.

On 30 July the PPF published an update to its Consultation on the Future Development of the Pension Protection Levy. As well as setting out the PPF’s initial conclusions, this document summarises the 63 responses received from industry to its original consultation in November 2008 and also takes account of the feedback from the 500 delegates who attended PPF roadshows held last year. The two key decisions made by the Board are:

• it remains committed to developing a levy that more accurately reflects schemes' long-term risks, and
• two industry groups will be set up to look at refining proposals for a new levy formula.