UK - The Department for Work and Pensions is consulting on changes to Financial Assistance Scheme (FAS) regulations in an effort to avoid pension schemes being excluded from the Pension Protection Fund (PPF).
In December, it was revealed that the pension scheme for former construction firm George and Harding (G&H) was barred from entering the lifeboat fund when Zejwa, which acquired G&H in 2002, went into liquidation.
As the G&H pension scheme was closed by the time Zejwa acquired the company and it therefore never employed active members of the scheme, it was found to not comply with the current definition of the statutory employer.
In its consultation, the DWP said: "The government proposes to extend the FAS to cover schemes that began to wind up between 23 December 2008 (the day after the last possible date to have done so in the existing FAS regulations) to the day before these regulations come into force."
It added that while a change to PPF entry rules was considered, by doing so, it would allow pension funds to enter the scheme that had previously not been liable to its levy.
"This would breach an important principle that all PPF schemes are subject to the whole regulatory regime and could result in the PPF levy not properly reflecting the degree of risk that needed to be considered," the consultation argued.
Instead, proposals outline changes that would see schemes allowed to enter the PPF if the connection between statutory employer and scheme was severed before 10 June and the last statutory employer went into insolvency before the PPF's establishment.
The DWP warned that no further extension to FAS were planned: "It is of the view that trustees must be vigilant and ensure their schemes do not lose their connections to an employer meeting the statutory definition."
Responses to the consultation must be submitted by 1 September.
In other news, the PPF has named five actuarial consultants to sit on its newly formed actuarial valuation panel.
The UK lifeboat scheme said the arrangement would help pension funds transfer into the PPF more effectively, following an earlier trial that saw Punter Southall assist the transition of 50 schemes.
In addition to Punter Southall, Jardine Lloyd Thompson, Spence and Partners, Xafinity Consulting and Barnett Waddingham were named as members of the panel.
Head of operations at the PPF, Phillip Beecroft, said the agreement was a result of members demanding more certainty sooner.
He added: "Trustees and their advisers told us they wanted a more pragmatic approach during the assessment period, and our levy payers wanted to see a more efficient programme to help reduce the cost of the levy."
Beecroft said employing actuaries with specific knowledge of Section 143 valuations improved the quality of any completed and that the PPF had therefore decided to expand the pilot project and all underfunded schemes entering the lifeboat fund.
Finally, the National Employment Savings Trust (NEST) has appointed law firm Wragge & Co as its primary legal advisor.
The company said pensions partners Richard Lee and Glyn Ryland would lead its efforts in working closely with the scheme's in-house lawyers, while two further solicitors would be based in NEST's London offices.