The Financial Assistance Scheme (FAS) is part of the UK welfare system that offers help to members o
eligible schemeswho have lost out on their
pension
A pension (, from Latin ''pensiō'', "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments ...
either because their employer became
insolvent
In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet inso ...
between 1 January 1997 and 5 April 2005,
or is solvent but under a "compromise agreement" no longer has to meet its commitment to pay its debt to the
pension scheme
A pension (, from Latin ''pensiō'', "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments ...
.
Funding
It is funded by scheme assets and an estimated £1.9B of taxation
and is managed by Board of the
Pension Protection Fund
The 'Pension Protection Fund'' (PPF) is a statutory corporation, set up by the Pensions Act 2004, and has been protecting members of eligible defined benefit (DB) pension schemes across the United Kingdom since 2005. It protects close to 10 milli ...
(PPF), established by the Pensions Act 2004 which is accountable to Parliament through the Secretary of State for Work and Pensions.
However the FAS is financially separate from the PPF which is funded by a levy on direct benefit schemes. The pension is revalued in line with Price inflation up to National Retirement Age and the FAS tops up any amount received from a scheme annuity to a nominal 90% of the previously expected pension (up to a maximum of the FAS cap). It can also pay ill health benefits. Indexation rules change at retirement, such that some elements may not receive increases.
[{{cite web, url=http://www.pensionsadvisoryservice.org.uk/helpful-organisations/financial-assistance-scheme, title=Financial Assistance Scheme, accessdate=12 March 2010]
References
Pensions in the United Kingdom