Community: The Union for Life

The FAS assistance is based on your pension at July 2002, revalued to take account of inflation up to your retirement date e.g. someone retiring in 2010 at 90% of the revalued pension will actually get approx 114.5% of the 2002 pension.

Once the FAS assistance is in payment you will only get indexation on the pension earned after April 1997. The reason for this is many schemes had no indexing at all i.e. when their members retired they got a pension which stayed the same for the rest of their lives. In April 1997 the Government set up a system that would pay some indexing to private schemes. The ASW scheme had originally indexed at a flat 2.5% per year. It then changed to inflation capped at 3% per year and in April 1997 it changed again to inflation capped at 5% part of which was financed by the government. So as the PPF and FAS are both paying indexation it is only on service after April 1997. To this end it means we will get 5/60 of the 2002 pension as a calculator for increases.

If a member dies before their retirement date a widow/er's pension is payable from the date of death, this is equivalent to 50% of the pension that would have been payable revalued from 2002 to the date of death. This can be paid to children if they are of school age if no surviving partner. If the member dies after retirement age the widow/er would receive 50% of the pension the member was getting.

There are three options to retire early on health grounds.

The first is Ill Health Payments to qualify for this the member must be within 5 years of their normal retirement age (NRA) they must have a Doctors letter or certificate to say they cannot work again because of their medical condition. The drawbacks to this are 1) As you are taking the pension early you will lose the effect of revaluing from date taken to NRA, up to 5 years could be significant at inflation of 2 to 3% per year. 2) The pension calculated is actuarially revalued to make the total cost similar to retiring at 65, to keep the total cost the same when paying over a longer period means the monthly payment is reduced. 3) As you may be in receipt of benefits such as Pension Credit Council Tax or Housing benefit, if you take the ill health payment it could reduce the benefits leaving you no better off or even worse off. 4) Subsequent widow/er's pension at 50% of your pension means their pension would also be lower in future years.

The second is Severe Ill Health Payments to qualify for this you must be over 55 and the medical diagnosis must be a progressive illness that gives a much lower life expectancy. This is assumed to mean the person is expected to die within 5 years. It does not mean the Doctor has told you you will die within 5 years. In this case the 90% is calculated at the time of the illness so again less than if you reached your NRA, but is NOT reduced actuarially as with ill health payment you still may lose some benefits also affects widows pension as with first option .

The third way is Terminal Illness this is self explanatory and means you are not expected to live more than about 12 months. Here payments are calculated at date of application they are not reduced actuarially and can be put into payment at ANY AGE. In all three scenarios you or your representative would need to contact the FAS and ask for the relevant forms.