The DWP is currently conducting an extremely swift consultation on the draft Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008, which are being introduced to implement key elements of the extension to the Financial Assistance Scheme (FAS) announced on 17 December 2007 (see Aries article). In particular, all qualifying members will be guaranteed 90% of their accrued pension, payable from the later of the scheme's NRA and age 60.

To expedite payment, the DWP says, the written consultation period for these regulations has been limited to 2 weeks, closing on 20 March.

A further set of draft Regulations is expected before the end of March, which will make provision for other key elements of the package announced in December, such as early retirement on ill health grounds. There will be a final package of Regulations later in the year to deliver the remaining parts of the package, which will move the FAS to a position where financial assistance payments are calculated on a basis which is broadly comparable to that of the Pension Protection Fund.

At the same time the DWP is taking the opportunity to review the annuity factors that are currently employed to approximate annual rates of pension that could be secured by cash sums when FAS payments are determined in certain circumstances (eg where members may have taken a lump sum as part of their scheme benefit). A separate consultation document seeks views on the proposed revision of these factors, which will lead to higher assistance payments. Members will be paid the difference between their new entitlement and what they have already received, in addition to receiving reassessed payments in future. The consultation period began on 6 March and runs until 18 April 2008.

These two condocs can be downloaded from either the DWP 2008 consultations web page or the FAS website.

Meanwhile, today Pensions Minister Mike O'Brien announced the first six pension schemes backed by solvent employers to be admitted into the FAS:

• Expamet (a Hartlepool building materials supplier, whose pension scheme has 1,233 members);
• Fredk H Burgess (a Shrewsbury agricultural machinery retailer with 1,128 pension scheme members);
• Lucas Yuasa (a Birmingham car battery maker, with 747 members);
• Dragon Cosmetics (Maesteg, Mid-Glamorgan; 450 members);
• J & D Wilkie (a Kirriemuir industrial textile manufacturer; 366 members); and
• Norman Butcher (a Bromley insurance company; 140 members).

Regulations (SI 2007/3581) allowing this came into force on 19 December 2007. The six newly-qualified schemes are all schemes with 'compromise agreements' - where the trustees of an under-funded pension scheme agreed to accept less money for the pension scheme than the debt owed by the employer to the scheme. Such agreements are typically reached to avoid driving the employer into insolvency, which would not be in the best interests of pension scheme members. The Government last April announced that schemes with compromise agreements would be eligible for FAS assistance, suggesting that this would help around 8,000 members of some 16 schemes; it is presently unclear why only half this number of members and only 6 schemes are covered by today's announcement, or whether a further similar announcement is to be expected.

The Government's announcement on 17 December 2007 said that further schemes with solvent employers - other than just those with compromise agreements - would be admitted to the FAS. Legislation is to be brought forward "as quickly as possible" to give effect to this, according to today's press release.