Work and pensions secretary John Hutton announces review of use of pension assets of insolvent employers

The government has announced a review of pension scheme assets held by employers who have gone bankrupt.

The focus of the review will be on whether better use could be made of the remaining assets within the failed pension schemes that have qualified for the Financial Assistance Scheme (FAS).

It will:

• examine how to make best use of the assets in pension schemes that are winding up under-funded with an insolvent employer
• determine whether these sources of funding could be used to increase assistance for affected scheme members
• consider any suggestions from interested and concerned parties.

The review will be conducted by the Department for Work and Pensions and advised by a panel of technical experts. It will report by the end of the year.

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Work and pensions secretary John Hutton said: “The extension of the FAS announced by the chancellor last week represents a major increase in the support available to people whose pension schemes were wound up under-funded due to employer insolvency.

“However, several alternative methods of funding have been proposed, in particular the pooling of scheme assets from the affected schemes. Although these have already been considered, the government has agreed to look again at this suggestion.”