Workplace Pensions: Index Linking
The question
To ask the Secretary of State for Work and Pensions, what assessment has he made of the number of FAS and PPF members whose original pension scheme did not provide for specified pre-1997 indexation and will therefore not be included in the Government’s plans announced in the Budget on 26 November.
Answered by Torsten Bell
At the Budget, the Chancellor announced that the Government will introduce pre-1997 indexation in the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS), for members whose original schemes provided this. Compensation payments from these schemes on pensions built up before 6 April 1997 will be CPI-linked (capped at 2.5%), and this will apply prospectively.
The PPF have made an assessment that around 165,000 PPF members and 91,000 current FAS members have some pre-97 benefits where their former schemes provided mandatory indexation. The remaining members will not fall within the scope of our reforms, either because these members had no mandatory pre-97 indexation in their original schemes, or no pre-97 service.
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