FAS does not pay 90% of lost pensions – Government spin – Ros Altmann

    Ros is a leading authority on both private and state pensions,annuities and
    retirement policy. Numerous major awards have recognised her work to
    demystify finance and make pensions work better for people.

  • Ros Altmann

    Ros Altmann

    FAS does not pay 90% of lost pensions – Government spin

    FAS does not pay 90% of lost pensions – Government spin

    Minister Misleads Media about Thousands Who Lost Pensions

    by Dr. Ros Altmann

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    Angela Eagle says FAS will guarantee at least 90% – this is simply not true. Does she not know, or does she not want to admit the truth?

    The Department for Work and Pensions has just put out a Press Release claiming that the Government will guarantee ‘at least 90 per cent’ of the pensions of those people who lost out when their employer scheme failed. This is simply not true.

    The Financial Assistance Scheme, which is of course very welcome and has made a significant difference to many victims’ lives, pays only UP TO 90 per cent. For almost all of the 150,000 victims the payments will actually be less than 90%.

    After battling for many years, the Government eventually agreed to ensure that Financial Assistance Scheme (FAS) payments would be in line with those paid out by the Pension Protection Fund (PPF).

    This was a tremendous victory for the victims, but was only won after we had to take the Government to court over its failure to accept the verdicts of the Parliamentary Ombudsman and Parliamentary Public Administration Select Committee, which called for full compensation. The High Court and the Court of Appeal ruled that the Government had behaved unlawfully. Finally the DWP agreed to improve the FAS to PPF levels.

    At the time, the victims thought they would receive 90% of their pension, They have subsequently discovered this is not true.

    Yet the Government is still misleading the media and Parliament that in fact 90% will be paid. It will not.

    I am not sure whether Angela Eagle knows this is not true and is misleading the public and Parliament on this matter, or whether she does not actually understand that it is not even 90%, never mind the ‘at least 90%’, which she is claiming in today’s Press Release.

    Of course, it is fantastic that these poor people are finally getting much of their pension, rather than waiting in desperation with nothing. Equitable Life victims, in contrast, are yet to receive a penny, so the fact that victims are actually receiving money is most encouraging.

    But the DWP should be honest about the extent of reductions it is making. The Parliamentary Ombudsman recommended that Government should replace the lost pensions in full, because it had misled workers into believing their pensions were safe, when they were not. It has refused to accept the verdict of its own Ombudsman.

    All the way through this scandal, the victims were told that taxpayers could not afford to replace 100% of the lost pensions, despite the Parliamentary Ombudsman’s recommendation. They had accepted this, but are now feeling bitter because they have subsequently watched taxpayers underwriting 100% of the pensions for bank workers at Northern Rock, Bradford and Bingley, RBS and Lloyds. Those scheme members have not suffered any pension reductions at all, even though their firms have failed.

    The FAS victims, therefore, are most unhappy to have lost a chunk of their pensions. Many of them are angry and feel they have been treated unfairly, as it seems almost impossible to understand why .bankers’ pensions are more important than those of former workers in Allied Steel and Wire, United Engineering Forgings, Dexion, Samuel Jones and all other FAS schemes.

    It is bad enough that their pensions are reduced, but even worse to see the DWP trying to pretend they are getting at least 90%, when this is simply not the case.

    When will we have some fairness and honesty on this issue from the Government?


    Dr. Ros Altmann
    07799 404747

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