The Financial Assistance Scheme
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The Financial Assistance Scheme (FAS) offers help to some people who have lost out on their pension where they were a member of an under-funded defined benefit pension scheme that started to wind up between 1 January 1997 and 5 April 2005, and the employer is insolvent, a compromise agreement has been reached with the employer, or where on wind-up the employer was still solvent and any debt the employer was obliged to pay to the scheme had been paid (or a sufficient proportion had been paid) but that wasn't enough to secure members' benefits in full.
The scheme is managed by the Department for Work and Pensions and is administered by the FAS Operational Unit (FAS OU). It makes payments to top up scheme benefits to eligible members of schemes that are winding up or have wound up.
Assistance is also payable to the survivor of a pension scheme member . A survivor is the member’s surviving wife, husband or civil partner of a member or former member of a qualifying pension scheme who died after the scheme started to wind-up.
From the coming into force on 4 June 2008 of the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008, eligible members’ scheme benefits will be topped up to 90 per cent of their accrued pension (subject to a cap of £26,000 per annum). This will be payable from normal retirement age (subject to a lower age limit of 60 and an upper age limit of 65).
Previously the headline rate of assistance was 80 per cent and this was not payable before age 65, regardless of a member’s normal retirement age. The FAS OU will be assessing all new cases on this basis and aim to have reassessed all existing cases in payment by August 2008. The FAS OU is working with the trustees of eligible schemes to obtain as quickly as possible the necessary data to pay those below age 65 who have already reached their normal retirement age.
As a result of these changes some members will become entitled to new payments, or to increased payments, for a past period. This period will be the later of: (a) their normal retirement age; or (b) 14 May 2004 when the FAS was first announced.
These extensions to the FAS are part of a package announced on 17th December 2007.
You can read further information about eligibility for the Financial Assistance Scheme.