What happens when a scheme applies
There are four stages to the FAS process
During the initial stages of notification and qualification the circumstances of the scheme as a whole are considered to decide whether the qualifying conditions for FAS are met. A scheme professional will usually complete this stage of the process and provide the necessary documentation. Only members of schemes that have successfully completed both of these stages can be considered for assistance.
After a scheme has successfully completed notification and qualification, the scheme professional will be asked to provide the information needed to assess the eligibility of individual members of the scheme.
Once the necessary member data is received, schemes enter the assessment stage. This is when the work starts to identify individual members who are eligible for FAS and calculate the levels of assistance they are due.
FAS payments usually commence to eligible members when they reach their scheme normal retirement age (or 60 where normal retirement age is below 60, or 65 where their normal retirement age is above 65). But the rules are different for survivors. Following assessment any members who are due assistance immediately progress to the final stage of payment. Eligible members who are not at normal retirement age or a minimum age 60 will progress to payment as they become due.
Further details of what is involved at each stage are given below.
Notification
This is the first part of the application process. To complete notification the FAS Operational Unit (FAS OU) must be provided with some basic information about the scheme on part A of the Notification and Qualification form FAS A1.
This information is usually provided by a trustee, manager, or professional advisor to the scheme (or, in the case of a fully wound-up scheme, a former trustee, manager or professional advisor).
Successful notification does not mean that a scheme will automatically qualify for FAS, but a scheme cannot qualify unless it has first completed notification.
All of the schemes that have provided sufficient details to notify are included on the scheme list. If you think your scheme should have applied for FAS but it does not appear on the list you should in the first instance make enquiries with the scheme trustees. If you then require further information please contact us.
Qualification
This is the second part of the application process. To progress to qualification the scheme needs to complete part B of the Notification and Qualification form FAS A1 and return it, together with the supporting documentation needed to decide if the scheme qualifies for FAS. The period allowed for schemes to complete this part of the process, and provide the required evidence is six months from the date the information is requested by the FAS Scheme Manager.
The documents required include a copy of the scheme’s trust deed and rules together with evidence of tax approval, wind-up date, name of employer and confirmation of the employer’s insolvency.
Applications for compromise agreement schemes must provide:
- a signed deed of compromise
- statements of accounts showing employers assets and liabilities, and
- documentary evidence of the full debt payable to the scheme.
For applications for schemes where the employer is still solvent but discharged the debt it was legally required to pay, or an appropriate portion of the debt, you must provide evidence that:
- there was no debt due at wind-up;
- the employer paid the debt due at wind-up; or
- there was a good reason why the debt wasn't paid.
This information is usually provided by a trustee, manager, or professional advisor to the scheme (or, in the case of a fully wound-up scheme, a former trustee, manager or professional advisor).
Once this information is received the FAS Operational Unit must decide if the scheme qualifies for FAS. To meet the qualifying conditions a scheme must:
- have completed the notification process (as described earlier);
- not be a money purchase scheme (also known as defined contribution scheme where a member’s benefits are based on the contributions paid by them and for them by their employer); and
- have begun the winding-up process between 1 January 1997 and 5 April 2005
The FAS can make payments only to members of schemes that successfully satisfy the qualifying conditions.
Provision of Member Data
Once a scheme has successfully completed qualification, and before the assessment stage can begin the FAS Operational Unit needs to be provided with information about individual members and their pensions. This information is required to be provided by the professionals who are, or who were, involved in winding-up the scheme (this may be the trustees, administrators or insurers). A period of three months is allowed for the provision of this data.
Where the member will have reached their normal retirement age by 17 January 2009 (the date six months after the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 came into force) this period ends three months after the day the information was requested.
Where the member will not have reached their normal retirement age by 17 January 2009, the information must be provided in the period which ends three months before the member’s normal retirement age.
In cases of ill health or terminal illness, the information must be provided within 14 days of the request for information. The process at this stage is determined by whether the scheme is still winding-up, or if it has completely wound-up.
Further information on the data that is required by the FAS can be found by reading the The Financial Assistance Scheme - A guide to completing form S1 for Initial Payments (FAS P4) (122KB) 
and the The Financial Assistance Scheme - A guide to completing form S1 for Annual Payments (FAS P4) (146KB) .
If the scheme is currently winding-up - The final amount of FAS due to eligible members can only be calculated once the winding-up process has been completed: for some schemes this may take a number of years. To allow members who reach scheme normal retirement age during the winding-up period to receive assistance, the Scheme Manager has the discretion to award initial payments.
If the Scheme Manager agrees to make initial payments the trustees are asked to supply data on those members who are, or who will shortly reach scheme normal retirement age.
If the scheme has fully wound-up - As the winding up process has concluded the final level of benefits secured for members by the scheme will be known. At this stage the trustees or administrators are asked to provide the Scheme Manager with information on all members of the scheme in order for us to assess the scheme for final payments.
Assessment
This stage of the process begins once the necessary member data is received. Eligible members are identified and the levels of assistance payable are calculated.
Further information on the data that is required by the Financial Assistance Scheme can be found by reading The Financial Assistance Scheme - A guide to completing form S1 for Initial Payments (FAS P4) (122KB) and The Financial Assistance Scheme - A guide to completing form S1 for Annual Payments (FAS P4) (146KB) .
FAS annual payments will top up the pension paid by the scheme to a level broadly equivalent to 90 percent of the eligible members accrued pension rights, subject to a cap of £26,000.
The calculation of initial payments follows a similar formula to the calculation of annual payments. If initial payments are awarded, these continue until the winding-up is completed and final levels of assistance can be determined. At this stage it may be necessary to adjust levels of assistance to take account of the actual amount of benefits secured from the scheme.
Payment
FAS payments to eligible scheme members can usually commence at their scheme normal retirement age or minimum age 60. Surviving spouses and civil partners of qualifying members can be paid at any age. Payments can be made to members who are not yet at normal retirement age if they are unable to work due to ill health and are likely to continue to be unable to work due to ill-health through to their normal retirement age. FAS payments are also available to eligible scheme members who are terminally ill with a progressive disease which means they are unlikely to live longer than six months. Qualifying members with ill health or terminal illness should read Early access to FAS payments.
After the scheme has been assessed, eligible beneficiaries are notified and sent the Personal Details form FAS A2 to complete in order to confirm their personal details. Payments cannot begin until this form has been completed and returned to the FAS Operational Unit.
The amount of any FAS award is taken into account for the purposes of means tested benefits (Pension Credit, Income based Jobseekers Allowance, Income Support, Housing Benefit and Council Tax Benefit). Members who are in receipt of such benefits should inform their benefit paying office that they have been awarded FAS, and discuss how it will affect the amount of benefits payable to them. Because their income will be affected members are encouraged to discuss the position with their benefit paying office before completing and returning the Personal Details form FAS A2.
FAS is paid monthly, directly into a bank, building society or internet account on the 21st of each month. For members whose payments are due immediately, the first is usually made approximately two weeks after we receive the completed Personal Details form FAS A2 and includes payment of any arrears that are due.