Key Dates

Consultation paper and draft regulations issued on 18 September 2017.  Consultation closed on 25 October 2017.

The introduction of an increased FAS long service cap was announced on 15 September 2017.

The Financial Assistance Scheme (Increased Cap for Long Service) Regulations 2018/207 in force on 21 February 2018

Summary

Draft regulations have been issued to increase the annual cap on support from the Financial Assistance Scheme (FAS) in respect of members with more than 20 years' pensionable service in the same scheme. 

• The FAS cap applicable when FAS compensation first becomes payable will be increased by 3% for each full year of pensionable service over 20 years, subject to a maximum of double the standard cap.

• The increase will not be backdated and will apply from the first pay day after the amending regulations come into force.

• A member whose FAS compensation is increased by the long service cap will not be able to take an additional pension commencement lump sum (tax free cash) in respect of the increased pension.

Background

• Broadly, the FAS offers support to pension scheme members whose scheme:

  • commenced winding up between 1 January 1997 and 5 April 2005 and which does not have sufficient funding to pay members' benefits in full; or

  • commenced winding up after 5 April 2005 but is ineligible for the Pension Protection Fund (PPF) because the employer became insolvent before this date.

• Assistance from the FAS is subject to a cap (£34,339 per year for individuals whose entitlement commences between 1 April 2017 and 31 March 2018).

• A similar increased long service cap was introduced for PPF compensation in April 2017.

Date Accessed: 03/12/2021