The Financial Assistance Scheme—eligibility and entry
Produced in partnership with Weil Gotshal & Manges and Joanne Etherton of Client Earth

The following Pensions practice note produced in partnership with Weil Gotshal & Manges and Joanne Etherton of Client Earth provides comprehensive and up to date legal information covering:

  • The Financial Assistance Scheme—eligibility and entry
  • Criteria for eligibility for the Financial Assistance Scheme
  • Eligibility criteria for schemes
  • Schemes not eligible for the Financial Assistance Scheme
  • Eligibility criteria in respect of scheme employers
  • Solvent employer that has no further liability to the scheme
  • Insolvent employer
  • Types of insolvency event for the purpose of FAS eligibility
  • Special provisions for employers unable to undergo insolvency
  • Other insolvency events
  • More...

The Financial Assistance Scheme—eligibility and entry

Criteria for eligibility for the Financial Assistance Scheme

The Financial Assistance Scheme (FAS) closed to Notification and Qualification of new schemes on 1 September 2016. Members who are in receipt of, or with a deferred entitlement to receive, assistance payments from the FAS are not affected by the closure.

For benefits to be payable from the FAS, distinct but related criteria must be satisfied in respect of:

  1. a scheme

  2. its sponsoring employer(s), and

  3. individual members

Generally, underfunded defined benefit schemes that started to wind up on or after 6 April 2005 should look to the Pension Protection Fund (PPF) to provide members with their promised benefits, rather than the FAS.

However, the FAS may be appropriate where the scheme entered winding up on or after 6 April 2005 but its sponsoring employer had become insolvent before that date.

The eligibility criteria and process for entry into the FAS are set out in the Financial Assistance Scheme Regulations 2005 (the FAS Regs), SI 2005/1986.

Eligibility criteria for schemes

A scheme is eligible for entry into the FAS if it is a 'qualifying pension scheme'.

A qualifying pension scheme is a defined benefit scheme:

  1. that started to wind-up either:

    1. between 1 January 1997 and 5 April 2005, or

    2. between 6 April 2005 and 22 December 2008 but is not eligible for the PPF because its sponsoring employer became insolvent

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