Financial_Assistance_Scheme

Financial Assistance Scheme

Financial Assistance Scheme

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The Financial Assistance Scheme (FAS) is part of the UK welfare system that offers help to members of eligible schemes who have lost out on their pension either because their employer became insolvent between 1 January 1997 and 5 April 2005,[1] or is solvent but under a "compromise agreement" no longer has to meet its commitment to pay its debt to the pension scheme.[2]

Funding

It is funded by scheme assets and an estimated £1.9B of taxation [3] and is managed by Board of the Pension Protection Fund (PPF), established by the Pensions Act 2004 which is accountable to Parliament through the Secretary of State for Work and Pensions.[1] 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.[4]

References

  1. [1]
    "The Financial Assistance Scheme". Retrieved 10 March 2010.
  2. [2]
    "Pension schemes with solvent employers urged to contact FAS review". 6 September 2007. Archived from the original on 9 October 2009. Retrieved 12 March 2010.
  3. [3]
    "Hain welcomes interim findings of Assets Review". 16 July 2007. Archived from the original on 9 October 2009. Retrieved 12 March 2010.
  4. [4]
    "Financial Assistance Scheme". Retrieved 12 March 2010.
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