Underfunded Schemes - Financial Assistance Scheme
- The Financial Assistance Scheme is administered by the Pension Protection Fund and was established under the Pensions Act 2004. It provides a top up to defined benefit schemes which are either winding up or already wound up.
- To be eligible for help from the Financial Assistance Scheme a fund must have begun winding up between 1 January 1997 and 5 April 2005 and have a scheme employer that is either insolvent or treated as subject to an insolvency event by the PPF.
- Schemes that began to wind up during after 5 April 2005 but which are ineligible for the Pension Protection Fund because the employer became insolvent before 5 April 2005 may be eligible for FAS.
- The scheme has to be underfunded with an employer who cannot meet the shortfall and a member whose benefits were accrued under that employer in the timeframe cited above.
- Payments to members are limited to 90% of the pension accrued in the scheme at the start of the wind up and will be made up of remaining scheme funds and an FAS top-up.
- Members who left the scheme before normal retirement age will have their payments revalued and capped, although the FAS does allow for ill-health retirement and spouse/civil partner pensions.
- From September 1 2016 the FAS will be closed to new applications.If you think you have a scheme which is eligible for FAS you must take action before 1 September 2016.