Legislation
Summaries of the key provisions of legislation appear below, but only as a guide which does not cover every circumstance. It is possible that some of the information has been simplified, or may have subsequently been superceded because of changes to the law. No reliance should be place on this information when considering your own specific circumstances. The full Regulations relating to the Financial Assistance Scheme (FAS) as they came into force can been found via the links to the website of the Office of Public Sector Information (OPSI).
The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010 came into force on 2 April 2010. These Regulations:
- Make provision for FAS qualifying pension schemes to transfer scheme assets to government
- Make provision for payments to those scheme members whose asset share would have been sufficient to pay pensions in excess of standard FAS entitlement; and
- Make provision for payments of retirement lump sums to certain members of schemes transferring assets
See the Regulations of April 2010 at:
http://www.opsi.gov.uk/si/si2010/uksi_20101149_en_1
The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009 came into force on 10 July 2009. These Regulations:
- Implement final changes to the FAS assistance payable to those qualifying members whose schemes are not transferring assets to government have, or will have, discharged their liability to their members through existing routes such as the purchase of annuities; and
- Implement changes to FAS administrative procedures, including making the Board of the Pension Protection Fund (PPF) the FAS scheme manager.
See the Regulations of July 2009 at:
http://www.opsi.gov.uk/si/si2009/pdf/uksi_20091851_en.pdf
A consolidated version of the Financial Assistance Scheme Regulations 2005 (SI 2005/1986), which sets out the way in which FAS payments are calculated, has been prepared showing the changes introduced by the draft Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009. This only reflects the changes to the Financial Assistance Scheme Regulations 2005; amendments are also made to other regulations.
Financial Assistance Scheme and Incapacity Benefit (Miscellaneous Amendments) Regulations 2009 came into force on 27 March 2009:
- Early unreduced payments on the grounds of severe ill health.
- Qualifying members will be aged 55 or over, not terminally ill but with a significantly shortened life expectancy.
See the Regulations of March 2009 at:
http://www.opsi.gov.uk/si/si2009/uksi_20090792_en_1
Financial Assistance Scheme (Amendment) Regulations 2008 came into force on 23 December 2008:
- Provide an exception to one of the qualifying conditions for the Financial Assistance Scheme (FAS), that schemes must have commenced winding up by 5 April 2005.
- Enable certain occupational pensions which could not qualify for the Financial Assistance Scheme or the Pension Protection Fund to be qualifying schemes for the Financial Assistance Scheme.
See the Regulations of December at:
http://www.opsi.gov.uk/si/si2008/uksi_20083069_en_1
Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 came into force on 17 July 2008:
- Early reduced payments on the grounds of ill health.
- Included certain schemes where the employer is still trading and solvent.
- Removed the deemed buy back option for FAS qualifying members.
- Provided powers for the Pension Protection Fund to manage the transfer of scheme assets and liabilities during wind-up.
- Provided the FAS scheme manager with powers to direct trustees in certain circumstances.
See the Regulations of July 2008 at:
http://www.opsi.gov.uk/si/si2008/uksi_20081903_en_1
The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 came into force on 4 June 2008. A key amendment was:
- Payment at 90 per cent of a qualifying members’ expected pension, subject to the cap, from normal retirement age (subject to a lower age limit of 60).
See the Regulations of June 2008 at:
http://www.opsi.gov.uk/si/si2008/uksi_20081432_en_1
and read their Explanatory Notes (40KB) 
The FAS (Miscellaneous Provisions) Regulations 2007
- Payment at 80 per cent of core expected pension for members of qualifying schemes.
- Minimum payment rule abolished.
- Cap increased from £12,000 to £26,000 p.a.
- Extended indefinitely the insolvency cut-off date, subject to that event being linking with winding-up.
- Extended the FAS to schemes whose trustees had entered to a compromise agreement with the relevant employer.
- Made changes to the way payments are calculated, re-determined and recovered.
NOTE: These regulations amend the Financial Assistance Scheme Regulations 2005 and the Financial Assistance Scheme (Provision of Information and Administration of Payments) Regulations 2005.
See the Regulations of December 2007 at:
http://www.opsi.gov.uk/si/si2007/pdf/uksi_20073581_en.pdf
The Financial Assistance Scheme (Halting Annuitisation) Regulations 2007
- Prohibited trustees of FAS qualifying schemes from purchasing or agreeing to purchase annuities on behalf of FAS qualifying members (subject to certain exceptions).
See the regulations of September 2007 at:
www.opsi.gov.uk/si/si2007/20072533.htm and
the Guidance to Accompany Publication of Regulations Restricting Annuity Purchase (32KB)
The FAS (Miscellaneous amendments) Regulations 2006
- Extended eligibility to members of qualifying pension schemes who were within 15 years of their scheme pension age on 14 May 2004.
- A new definition of multi-employer scheme.
- Provision for including employers in schemes that had not formally had an insolvency event, including those where the employer had been subject to overseas insolvency proceedings.
- Amendments linked to the calculation of FAS payments, new review and appeal rights, and powers linked to the determination of terminal illness.
- Clarification of rules around survivor payments.
- Clarification that initial payments are on account of annual payments
Note: These regulations amended the Financial Assistance Scheme Regulations 2005; the Financial Assistance Scheme (Internal Review) Regulations 2005; and the Financial Assistance Scheme (Appeals) Regulations 2005.
See the Regulations of December 2006 at:
http://www.opsi.gov.uk/SI/si2006/20063370.htm
and read their Explanatory Notes (63KB)
The first payments were made to members in December 2005 in line with the Government’s commitment to make them by the end of the year.
The Financial Assistance Scheme (Appeals) Regulations 2005
- Provision for the Pension Protection Fund Ombudsman or a Deputy to investigate and determine appeals against review decisions made by the scheme manager of FAS.
Details of the Regulations of November 2005 at:
www.opsi.gov.uk/si/si2005/20053273.htm
The Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005
- Allowed the functions of the Pension Protection Fund Ombudsman to be delegated to his staff.
- Publication of any matter by the Ombudsman in connection of a FAS appeal to be privileged
- Amendments to clarify review decisions, and in relation to survivors.
Note: These regulations applied and modified certain provisions in the Pensions Act 2004 and amended the Financial Assistance Scheme Regulations 2005; the Financial Assistance Scheme (Internal Review) Regulations 2005; and the Financial Assistance Scheme (Provision of Information and Administration of Payments) Regulations 2005.
See the Regulations of November 2005 at:
www.opsi.gov.uk/si/si2005/20053256.htm
1 September 2005
Majority of the provisions in the FAS Regulations 2005 come into force.
- Schemes must have started to wind-up between 1 January 1997 and 5 April 2005 and meet certain other qualifying criteria.
- Members of qualifying schemes who were within 15 years of their normal retirement age on or before 14 May 2004 may qualify for assistance payments, at tapered levels, related to normal retirement age.
- Qualifying members generally entitled to payments at age 65.
- Eligible survivors of qualifying members who have died may also qualify for payments (at a lower level) regardless of their age.
- Payments subject to a cap (£12,000 a year) and to a de minimis amount (of £520 a year).
- In general, payments made whilst pension schemes are winding-up ("initial payments") are paid at a lower rate than final payments ("annual payments"), at up to 60 per cent of expected core pensions.
The Financial Assistance Scheme (Provision of Information and Administration of Payments) Regulations 2005
- Prescribed what information is to be provided to, and by, the scheme manager of FAS to determine scheme and member eligibility.
- Granted the scheme manager the power to refuse to make a determination until such time as sufficient or suitable information on a scheme or member eligibility is provided.
- Recovery of any over-payments.
See the Regulations of August 2005 at:
www.opsi.gov.uk/si/si2005/20052189.htm
and the Explanatory Memorandum at
www.opsi.gov.uk/si/em2005/uksiem_20052189_en.pdf
The Financial Assistance Scheme (Internal Review) Regulations 2005
- Provision for internal review of reviewable determinations made under the FAS. Sets out the application, notification and the review process.
See the Regulations of July 2005 at:
www.opsi.gov.uk/si/si2005/20051994.htm
The Financial Assistance Scheme Regulations (2005)
- Established the FAS and prescribed payments of a level broadly equivalent to 80 per cent of a qualifying member’s expected core pension (subject to a £12,000 cap).
See the Regulations of July 2005 at:
www.opsi.gov.uk/si/si2005/20051986.htm
The Pensions Act 2004
Provision for a financial assistance scheme for qualifying members of certain pension schemes appears in Part 6 of the Pensions Act at:
www.legislation.hmso.gov.uk/acts/acts2004/20040035.htm
On 14 May 2004, the Government had announced plans for a Financial Assistance Scheme to assist those who had lost, or who stood to lose, significant amounts as a result of their pension scheme winding-up under-funded with an insolvent employer.
