The Work and Pensions Committee (WPC) has requested further details from the Department for Work and Pensions (DWP) on its differing approach to paying arrears to members of the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS).

The WPC previously queried why the DWP had taken a different approach when paying arrears to the PPF and FAS, with the Pensions Minster, Guy Opperman, replying to confirm that there is "no legal basis to pay interest" on FAS arrears.

However, WPC chair, Stephen Timms, has now written to Opperman to request further details, stating that his reply “did not directly answer the second half of our question about whether or not the department is still in the process of finalising its approach to this case”.

Timms also argued that whilst the compensation cap was unaffected by the Court of Appeal judgment and that there is no legal basis for paying interest on arrears, “it is surely within the government’s power to change the regulations to bring them into line with PPF regulations”.

He pointed out that an alternative approach could be taken to interest payments, using the department’s discretion under HM Treasury’s guidance on managing public money.

Timms stated: “You say that the FAS is funded entirely from the public purse and therefore the Secretary of State has a duty to consider the interests of the taxpayers who fund the scheme.

“However, I understand that the numbers of people affected are small (94) and the FAS was part-funded by the assets of affected schemes, transferred to the government following the Young Review in 2007. Other aspects of the court rulings have applied equally to FAS and PPF members.

“The difference in treatment - with regard to both interest payments and the compensation cap - is hard to explain, and I would be grateful for a detailed explanation of the approach you have taken.”

In addition to this, Timms again called on the department to consider meeting representatives of the Pensions Action Group, noting that whilst the government was reluctant to meet when the issue was before the courts, this is no longer the case.

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