Pensions: Financial Assistance Scheme
Work and Pensions
Richard Graham (Gloucester, Conservative)
To ask the Secretary of State for Work and Pensions
(1) how many people are making repayments to the Financial Assistance Scheme;
(2) how many people have failed to repay in their lifetime the entire sum they owned to the Financial Assistance Scheme; how many such people have repaid more than the sum they owed to the scheme; and whether there has been a net loss or net gain to the public purse as a result;
(3) what steps are taken to remove repayment deductions from the pension of pensioners who have repaid in full money owed to the Financial Assistance Scheme.
Steve Webb (Minister of State (Pensions), Work and Pensions; Thornbury and Yate, Liberal Democrat)
3,881 people are repaying money to the Financial Assistance scheme (FAS), of which 3,846 had their FAS assistance adjusted to take account of the overpayment. The remainder have no ongoing entitlement to FAS payments.
The information requested in respect of the number of people who have either failed to repay their FAS overpayment or overpaid an FAS overpayment is not available in the format requested. To date 99 members have died before repaying their FAS overpayment.
The FAS scheme manager recovers the overpayment over the lifetime of a member in the form of a notional annuity, which is calculated taking into account actuarial mortality assumptions (and other actuarial assumptions). If an individual member lives longer than predicted they will pay back more. However, the effect of the assumptions used is in general that more members will pay back less than they owe. This approach is in line with the general action taken by an occupational pension scheme, who on completion of winding up identify that a member has been overpaid. If members request they may pay back the overpayment as a lump sum.
In all cases the FAS scheme manager will consider representations to waive the recovery of a FAS overpayment.