The Financial Assistance scheme
The Financial Assistance Scheme (FAS) was set up to protect members who had defined benefit pension schemes.
The Financial Assistance Scheme (FAS) was set up to protect members who had defined benefits (final salary type benefits) in a workplace pension scheme, where:
- the employer became insolvent before 28 February 2006
- the pension scheme started to wind up between 1 January 1997 and 5 April 2005
- the pension scheme could not afford to pay those benefits promised to members on wind up.
FAS benefits are regarded as compensation and are paid in the form of a top-up, which aims to provide members’ with 90% of the defined benefit pension that they would have received at their Normal Retirement Age (NRA), up to a cap of £36,717 a year in the 2020/21 tax year.
If you're unable to work because of ill health, the FAS can make payments before your NRA, but there may be some restrictions. The FAS can only provide compensation for defined benefit schemes.
When FAS/PPF compensation is in payment, will it increase?
A. Indexation of FAS/PPF compensation will be limited to pensionable service accruals from 6 April 1997 only and capped at a maximum of 2.5%.
Where can I find out more?
If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.