Plugging the Holes in a Lifeboat
31st March, 2014
Following the introduction of the Financial Assistance Scheme (FAS) and the Pensions Protection Fund (PPF) the pensions landscape has been a far friendlier place. Prior to the introduction of “Lifeboats” pensions reporting in the general press was mainly related to horror stories of long serving employees losing the vast majority of pension provision due to the insolvency of their current or previous Employer.
The introduction of the PPF and FAS, has meant that such stories are no longer filling the tabloid press.
Unfortunately, a lifeboat will only work if it is water tight, and for the former employees of George & Harding Limited, they have found themselves on neither ship manifesto. The Trustees of the Scheme have lobbied tirelessly for several years to recognise the plight of their members. Dalriada has been operating as a Trustee for the George & Harding Pension Scheme since November 2011. It was widely acknowledged the Scheme entry to the FAS was a formality which has left the Trustees with difficult decisions in managing the remaining funds to ensure that the Scheme could continue to make benefit payments and be ultimately ready for entry to FAS.
I was extremely pleased to see the news that the news that the draft regulations have been approved and come into force with effect from 26th March 2014. This will allow the Trustees to move forward in securing certainty for the members which was the clear aim from the beginning of this process. Whilst entry to FAS can never be assured I would hope (and our lawyer has agreed) that legislation provisionally named after the Scheme would ultimately assist us!
This also has had an impact on another scheme. Dalriada was also appointed to the EIP Group Pension Scheme by the Pensions Regulator in early 2012.
It became clear that the EIP Scheme would not qualify for the PPF but, to the extent that the changes to the FAS Regulations were enacted as anticipated, the Scheme would qualify for the FAS as long as the Scheme was in wind up.
As such, Dalriada took the decision to put the EIP Scheme into wind up earlier that it might otherwise have done to ensure it had the fall back option of the FAS.
Perhaps, in the absence of horror stories of pension losses the industry can move forward with the positive press surrounding the positive beginning of auto enrolment and the flexibility promised in the recent Budget.