The draft Financial Assistance Scheme (Miscellaneous Amendments ) Regulations 2010 were laid before Parliament on 20 January and this was followed up on 28 January with consultative documents on draft guidance which amongst other areas sets out a proposed actuarial valuation process for pension schemes eligible for the Financial Assistance Scheme (FAS) and which will transfer assets to the government – these are referred to as FAS2 schemes. This guidance takes into account earlier consultation in the period 2 April to 15 May last year and a webinair for actuaries with speakers from the Pension Protection Fund.
Broadly the draft guidance sets out a mechanism for determining if members of FAS2 schemes should receive higher benefits than standard FAS compensation.
As mentioned in our earlier blog, “How pension schemes will be valued for admission into the Financial Assistance Scheme“, the PPF is proposing that the FAS2 actuarial valuation calculations will include equalisation of Guaranteed Minimum Pensions.
The current draft guidance does not differ materially from that issued last year and from the processes presented in the webinair; we believe that it is therefore unlikely that there will be many changes in the final guidance which we anticipate coming on stream by the middle of this year.
The PPF have built onto some the S143 actuarial valuation principles for schemes going through assessment but there are a substantial number of material differences. One area of similarity is that data has to be cleansed before the actuary is instructed to proceed and the actuary has to be satisfied with the quality of the data.
Spence and Partners have extensive experience of carrying out S143 valuations including data cleansing, and we are gearing up to adapt our professional skills for FAS2 schemes.
FAS has recently released an announcement and supporting information in relation to the calculation of tranched benefits when providing member data to FAS for payment of compensation.
FAS noticed a trend within the data already provided by administrators suggesting that equalisation for some members has not been taken into account or calculated correctly. Commendably Read more »
On 12th August 2009 the government published a consultation on the Draft Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010, to seek views regarding its proposals for the delivery of the remaining elements of the extension to the Financial Assistance Scheme (FAS) announced on 17th December 2007.
The draft regulations detail that a valuation must take place, on what basis the valuation is to be performed, how different types of liabilities and assets are to be treated and guidance on what information has to be included in the valuation report submitted.
The draft regulations explain Read more »
Spent much of yesterday in connection with caseworkers from the Pension Protection Fund who are taking over the role of coordinating entry to the Financial Assistance Scheme.
There is much that is wrong with pensions and retirement provision but the PPF and FAS are fantastic developments. Some members of schemes we administer would have received no benefit at all before their inception.
The protection schemes are not perfect but they must be hailed as a significant achievement of the current government though it is unfashionable to give them credit for anything these days.
Preparing a pension scheme for the PPF or FAS is a major project and if you have a scheme that needs sorted out here is a link to our Pensions Protection Fund and Financial Assistance Scheme services.
The Department for Work & Pensions have started a consultation on draft guidance prepared by the Government Actuary’s Department on the method and assumptions that will apply when actuaries undertake valuations in respect of FAS qualifying schemes to facilitate the transfer of assets. We hope that early consultation on this guidance will generate feedback on potential practical issues and enable schemes to start to undertake preparatory work.
Spence & Partners has launched a data evaluation tool for scheme trustees and administrators.
The specialist administrator’s launch follows guidance on record keeping from the Pensions Regulator (tPR).
The data tool evaluates the quality of electronically held scheme data and provides a rating. The report also delivers a quality rating in relation to a specific action, such as a scheme buyout or the provision of scheme transfers. Read more »
Hot on the heels of recently issued guidance from the Pensions Regulator on “Record Keeping – Good practice in measuring member data” specialist administrator Spence & Partners has launched a data evaluation tool aimed at scheme trustees and administrators.
The data audit report evaluates the overall quality of the scheme data held electronically and provides a rating. It can also provide a quality rating in relation to a specific exercise being undertaken, for example, scheme buyout or the provision of scheme transfers. The report provides information which meets the Pensions Regulator’s required outputs and provides a list of all the areas which need attention prioritised according to their potential impact. Read more »
In order to meet growing demand, Spence & Partners and its trustee company Dalriada Trustees Limited, has seized the opportunity provided by the decision of Mercer to close its specialist scheme terminations unit in Belfast, to recruit highly-prized and experienced staff to enhance and grow its specialist pension scheme discontinuance offering. Read more »