Survivors & the Financial Assistance Scheme (FAS)
What is a survivor?
For FAS, a survivor is the surviving wife, husband or civil partner of a member or former member of a qualifying pension scheme who died after the scheme started to wind-up.
This means that, for a survivor to be considered for FAS, their deceased partner (‘the member’) would need to meet the age criteria for FAS. Whilst this is currently to have been within three years of their pension scheme’s normal retirement age or older on 14 May 2004, the extension of FAS, which came into force on 15 December 2006, extends the normal retirement age criteria to those within 15 years of their scheme’s normal retirement age on 14 May 2004 and to their survivors.
Payments to survivors can begin regardless of the age of the survivor.
What can a survivor expect from FAS?
Survivors will receive a payment from FAS only if the member would have received a FAS payment. For example, it is possible a member could qualify for FAS by meeting the age criteria but wouldn’t actually have received a payment because they were already receiving over 80% of their expected pension from their scheme.
The amount a survivor will receive from FAS depends on how far their deceased partner was from normal retirement age on 14 May 2004. The extension of FAS creates three distinct groups of qualifying members:
- Group 1 members - within 7 years of their pension scheme’s normal retirement age on 14 May 2004 who will benefit from FAS topping up their pensions to 80% of their ‘expected pension’ (subject to a de minimis and a cap);
- Group 2 members – between 7 and 11 years who will be considered for a top-up to around 65% of their ‘expected pension’ (subject to a de minimis and a cap);
- Group 3 members – between 12 and 15 years who will be considered for a top-up to around 50% of their ‘expected pension’ subject to a de minimis and a cap).
The extension to FAS means that survivors of these groups of qualifying members will also become eligible for FAS.
We understand that, in general, pension schemes offer survivor benefits at around 50% of the member’s entitlement and the design of FAS reflects this.
What about surviving spouses of members who died before wind-up commenced?
Survivors of pension scheme members who died before the start of scheme wind-up will be ‘qualifying members’ for FAS purposes in their own right subject to their meeting the eligibility criteria. This is because they would have been entitled to pension payments themselves from the scheme before it started to wind-up.
At what age is a survivor entitled to FAS payments?
A qualifying member normally has to wait until age 65 until they receive a FAS payment, a survivor does not.
The survivor of a qualifying member becomes eligible for payments from whichever is the later of:
- 14 May 2004; or
- the day after the day on which the qualifying member died.
Payments are backdated to the date the survivor became eligible.
How are survivor’s payments calculated?
FAS is able to calculate annual payments when a pension scheme has discharged its liabilities to a member, which is usually on completion of wind-up. For survivors annual payments are determined using different methods which will generally depend on whether qualifying members died during wind-up or after wind-up has been completed.
- Method A: if a qualifying member dies after wind-up, their survivor will usually receive half of the amount that the qualifying member was receiving, or would have received, from the FAS.
- Method B: if a qualifying member dies before wind-up is completed, the amount of assistance payable to their survivor will generally be 50% of the member’s ‘expected pension’ multiplied by 0.8, 0.65 or 0.5 (depending on the group in which the qualifying member would fall), minus the ‘actual pension’ that the survivor will receive from the member’s scheme when the scheme completes wind-up.
The cap and de-minimis rules apply in each instance.
Initial payments are paid at the discretion of the FAS Scheme Manager where we are waiting for the scheme’s liabilities to be discharged and so cannot calculate annual payments.
Under the extension, the amount of assistance payable to their survivor:
- where that deceased qualifying member was a Group 1 qualifying member will be 50% of expected pension x 60%, less any interim pension paid by the scheme to the survivor (this is the same calculation as is applied to current FAS survivors).
- in any other case (Group 2 & 3) - 50% of the expected pension x 50% less the interim pension payable to that survivor.
- Again cap and de minimis rules apply.
When we come to assess the annual payment for these survivors we expect that Method B as described above will apply and any initial payments already paid to the survivor will be take into account.
What should I do to get a payment as a survivor ?
If your spouse or civil partner was already receiving FAS then we should have your details and payments to you should begin immediately. If your spouse or civil partner had been receiving FAS but you are not then you should contact us on the number below.
If your spouse or civil partner wasn’t getting FAS when they died and neither are you then you should contact your scheme trustees to see whether they have made an application on behalf or yourself or your late spouse or civil partner.
If you need further information about FAS please contact the FAS Operational Unit:
Financial Assistance Scheme (FAS)
PO Box 702
York
YO32 9XR
Phone: 0845 601 9942
Textphone: 0845 601 9942
Opening Hours: 9am – 5.30pm Monday to Friday