The Financial Assistance Scheme (FAS) has announced that it will be closing to new schemes from 1 September 2016.
The Financial Assistance Scheme was established to provide assistance to individuals who have entitlement to benefit in certain under-funded defined benefit schemes (that started to wind-up between 1 January 1997 and 5 April 2005) which did not have sufficient funds to provide for a prescribed level of benefits, and where the employer was not able or liable to meet the shortfall.
Certain schemes which started to wind up after 5 April 2005 but were ineligible for help from the Pension Protection Fund due to the employer becoming insolvent before this date, may also be eligible for FAS.
The deadline for applying for FAS entry was 28 February 2006, unless the Scheme manager opted to extend that period.
The FAS has now announced that it will stop taking applications from 1 September, 2016.
There is still time for eligible schemes to apply for entry and the FAS are keen to ensure that they are given a last chance to come forward with an application.
In order to be eligible a scheme must meet the following criteria:
- Is a Defined Benefit scheme which began winding up between 1 January 1997 and 5 April 2005, where either the sponsoring employer is insolvent or the Scheme Manager decides to treat it as if an insolvency event has occurred (i.e. where enforcement of the employer debt would have forced the employer into insolvency).
- Is a Defined Benefit scheme which began winding up between 23 December 2008 and 27 March 2014, where an insolvency event occurred in relation to the employer before 6 April 2005, and there has not been a qualifying insolvency event for the purpose of the Pension Protection Fund or the relevant employer (i.e. the last employer who employed active members of the scheme) ceased to be an employer in relation to the scheme before 10 June 2011.