The first six pension schemes wound up by solvent employers have been admitted to the government’s Financial Assistance Scheme (FAS).
The scheme, which tops up the pensions of employees belonging to schemes that wound up under-funded, has previously only accepted schemes that had been sponsored by companies that went bust.
The first six companies to be admitted to FAS, which have approximately 4,000 pension scheme members, are building materials supplier Expamet, agricultural machinery supplier Fredk H Burgess, car battery maker Lucas Yuasa, Dragon Cosmetics, textile manufacturer J & D Wilkie and insurance firm Norman Butcher.
The FAS operation unit will work with the trustees of the six schemes to make assessments and start making payments to eligible members.
Minister for Pensions Reform, Mike O’Brien, said: “It’s very worrying for people when their final salary winds up under-funded and they don’t know how much of their pension they will receive.
“In rarer cases, this can happen where the company continues trading, so I’m pleased that these six schemes have now qualified for the FAS – guaranteeing them a significant proportion of the of the pension they had worked hard for, broadly comparable to the compensation paid by the Pensions Protection Fund (PPF).”
O’Brien also suggested that the FAS would be extended to allow people to receive 90% of their pension from their normal scheme retirement age and that more schemes from solvent employers would be brought into the FAS later in the year.