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Glossary
Accrued Pension
The amount of pension you built up in your scheme before you left the scheme or it started to be
wound-up
.
Active Member
A member of a pension scheme who’s currently accruing pensionable service.
Actuarial Reduction
This is applied to normal
ill-health payments
because they start before your
normal retirement age
and they are therefore expected to be paid over a longer period of time. The reduction is determined by the Department for Work and Pensions (DWP) with advice from the Government Actuary’s Department (GAD).
Annual Payment
The annual amount that you’re eligible to receive from the FAS. It will be paid to you in monthly instalments.
Annuity
A product typically bought from an insurance company which entitles
top-up members
to receive a regular income for life and, potentially, an income to their
survivor
after their death.
Asset Share
The amount of money calculated and allocated by your former pension scheme to pay your scheme benefits, allowing for the scheme’s funding position.
Benefit Statement
This can be requested by deferred members to provide a forecast of the amount that will be payable at
normal retirement age.
An online benefit statement is available to FAS members registered to use this website. Register here.
Beneficiary
This refers to all members of qualifying pension schemes including Deferred Members, Active Members, Pensioner Members, Inherited Members and Pension Credit Members. ‘Beneficiary’ also refers to surviving spouses, civil partners or relevant partners and any eligible children of members of qualifying pension schemes who died after their scheme started to
wind-up
.
Board of the Pension Protection Fund
This is a statutory body established under provisions of the Pensions Act 2004.
Bridging Pension
This is a pension paid by a pension scheme normally between normal retirement age and state pension age. It is generally intended to ensure that an individual receives a stable income throughout retirement. Once the individual reaches state pension age, the bridging pension stops as state pension payments are then expected to begin.
Civil Partner
An individual in a civil partnership with the member under the Civil Partnership Act 2004.
Civil Partnership
A relationship between two individuals registered under the Civil Partnership Act 2004.
Contracted-Out Pension Scheme
This is a pension scheme that provides certain benefits to members, their widows, widowers or civil partners, in return for a reduction in National Insurance contributions. A lower State Additional Pension is paid as part of the State Retirement Pension as a consequence.
Deemed Buyback
Members of a contracted-out pension scheme may have restored some or all of their State Additional Pension in return for a payment from their scheme. This process is called ‘Deemed Buyback’.
Deferred Member
A member who is no longer an
active member
but who still has benefits preserved in the scheme which will be payable at a later date. The member may have left service of the employer, or may have opted out of the scheme.
Defined Benefit (DB) Pension Scheme
A pension scheme where scheme members are promised a set amount of benefit, for example where benefits are worked out in line with their length of service and salary.
Defined Contribution (DC) Pension Scheme
See
money purchase scheme
Early Retirees
Single payment members
who retired before your
normal retirement age (NRA)
and are still below your NRA, so are being paid based on your
notional pension
. When you reach your NRA, your standard assistance will be calculated and you will receive this amount if it is higher.
Eligible Child/Children
Your natural child (born or unborn at date of your death), your adopted child, or a child who was financially dependent on you at date of your death, who is:
Under 18
Over 18 and under 23 and in Qualifying Education, or
Over 18 and under 23 and has a Qualifying Disability.
Eligible Child/Children Payments
The payment amount received by any eligible children is based on the member’s expected pension or notional pension. This amount varies depending on whether the deceased member has left a survivor and the number of surviving dependants. For more information see our
‘Payments for spouses, partners and children’
booklet.
Employer
The company that employed you (a FAS member) while you were in
pensionable service
for your former pension scheme.
Expected Pension
The amount of pension you built up in your pension scheme before it started to
wind-up
, which is used by the FAS to work out how much you’re entitled to receive from us.
Ex-Spouse
An individual who was previously married to you (a FAS member).
FAS Cap
The amount, set by the Government and recalculated every year, at which
standard assistance
payments are capped or limited. The majority of members aren’t affected by this cap. You can find details of the FAS cap for this year in our
FAQs on entitlement
.
FAS Normal Retirement Age
The age, specified in the scheme rules, when you stopped accruing pension. This is the age at which you would normally retire. This is subject to a lower limit of age 60 and an upper limit of 65.
Former Civil Partner
An individual who was previously in a Civil Partnership with the member.
Guaranteed Minimum Pension (GMP)
In order to contract out prior to 6 April 1997, the scheme’s rules had to be designed to provide for a minimum amount of pension. This was known as the GMP.
Ill-Health Payments
These are available to members who are unable to work due to ill health and who are within five years of their FAS
normal retirement age
. These payments are actuarially reduced to take into account that they are in payment for a longer period of time. See also
severe ill-Health payments
and
terminal illness payments
.
Lifetime Allowance (LTA)
Since 6 April 2006, people have only been allowed a maximum amount of pension benefits throughout their lifetime without triggering a tax charge. This amount is called a lifetime allowance.
Money Purchase Scheme
Also known as defined contribution schemes. Money purchase “pension pots” are made up of member and employer contributions (if applicable) plus investment returns and tax relief, and are used to purchase an annuity. Benefit levels are not guaranteed.
Nomination Form
A form for you to complete to provide information to the FAS in respect of a nominated beneficiary.
Normal Pension Age
The age under the scheme rules of your former pension scheme at which you were entitled to payment of your pension without actuarial adjustment, disregarding any special provision for early payment.
Normal Retirement Age
The age specified in the scheme rules in force when you stopped accruing pension as the age at which the member will normally retire.
Notional Annuity
An estimate of the yearly pension paid out in return for any benefits the former scheme paid out on a member’s behalf before the scheme had fully wound up. The payments types include:
tax free cash lump sum to the member
transfer payment to another pension scheme
payment to the government to increase your state benefits (see
deemed buyback
)
trivial commutation lump sum to the member, or
winding up lump sum to the member.
Notional Pension
Our calculation of the annual amount your former scheme could have afforded to pay you, based on your asset share.
PAYE
Pay As You Earn is the collection of income tax at source by HM Revenue and Customs. This applies to income paid to FAS beneficiaries as well as to income from employment.
Pension Increases
The amount of your payment that increases may either depend on what your scheme could have afforded or it may relate to service after 5 April 1997. All increasing elements of your payment will go up each year by the rate of inflation, up to a maximum of 2.5 per cent.
Pensionable Service
This is your service as a contributing member of a scheme, plus any transfer credits notified on an individual basis.
Qualifying Disability
A child aged 18 or over can still be eligible to receive FAS Assistance (up to the age of 23) if they cannot undertake full time paid employment due to a disability which is covered by the Equality Act 2010.
Qualifying Education
A child aged 18 or over can still be eligible to receive assistance (up to the age of 23) if they’re in full time education. They will need to confirm their eligibility each year until they no longer qualify.
Qualifying Member
For the purpose of FAS, this is a member as defined in the Financial Assistance Scheme Regulations (Regulation 15).
Qualifying Pension Scheme
For the purpose of the FAS, this is a pension scheme as defined in the Financial Assistance Scheme Regulations (Regulation 9).
Relevant Partner
A relevant partner is someone of either sex who are not married, or in a civil partnership with, but who live together as if they are married or in a civil partnership.
Revaluation
Increases which aim to give some protection against inflation, normally up to your FAS normal retirement age.
Reviewable Determinations
FAS will make a formal decision about whether a scheme member can receive assistance and the amount they should receive. This is known as a determination. If a determination is disagreed, FAS can be asked to look at the decision. This is called a review.
Severe Ill-Health Payments
These are available to you if you are aged over 55, unable to work, have a progressive disease and a significantly-reduced life-expectancy. These payments are not actuarially reduced. See also
ill-health payments
and
terminal illness
Payments.
Single Payment Members
If your scheme did not pay out all of your available funds as mentioned above, they would have been transferred to the FAS. This means you will only receive payments from the FAS.
Standard Assistance
Our calculation of 90 per cent of your expected pension, reduced if higher than the FAS cap and minus any notional annuities.
Survivor
A FAS survivor is the spouse or civil partner of an eligible member of a qualifying pension scheme following their death. Relevant partners may be entitled to Assistance payments.
Survivor Payments
In most cases, we’ll pay an eligible spouse or partner payments after the member dies. For more information see our booklet
‘Payments for spouses, partners and children’
.
Tax Free Cash Lump Sum
Like most pension schemes, the FAS will allow certain members to choose to receive a tax free cash lump sum - (sometimes known as a pension commencement lump sum or PCLS) – on retirement in exchange for a lower annual pension. The amount of lump sum you can take is limited by certain FAS and tax rules. This is only an option if you are a
single payment member
.
Terminal Illness Payments
These are available to you at any age if you are terminally ill. These payments are not actuarially reduced. See also
ill-health payments
and
severe ill-health payments
.
Top Up Members
Your former schemes secured benefits for you before the scheme fully
wound-up
. They might have done this by purchasing you an annuity or by transferring the whole of your available funds to another arrangement. Alternatively, they may have pad you all of your available funds as a lump sum.
Wind-up (winding-up or wound-up)
Wind-up is the term normally used to describe the process by which a pension scheme comes to an end.