Pension Protection Fund: Q&A

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Does the Pension Protection Fund assist anyone with a pension scheme?

No. The Pension Protection Fund only protects members of certain UK-based defined benefit (final-salary) pension schemes, and defined benefit elements of hybrid schemes.

When will the Pension Protection Fund come into effect and how far back will it go – i.e. will I need to have been a member of my pension scheme at a certain date to be eligible for compensation?

The Pension Protection Fund became operational on April 6 2005. To be eligible for compensation, the scheme must be eligible (and, in broad terms, must have been eligible for three years prior to the assessment date), it must not have commenced wind up before April 6 2005 and there must have been a qualifying insolvency event in relation to the scheme's sponsoring employer on or after April 6 2005. There must also be insufficient assets in the scheme to secure benefits on wind-up that are at least equal to the compensation that the Pension Protection Fund would pay if it assumed responsibility for the scheme.

What happens if the Pension Protection Fund does not assumes responsibility for a scheme?

What happens to a scheme where the Pensions Protection Fund has not assumed responsibility for a scheme will depend on the circumstances of the scheme and the reason why it did not transfer to the Pension Protection Fund. For example, the scheme may have been rescued or have sufficient assets to meet the Pension Protection Fund protected liabilities. Members should contact the trustees of their scheme who should be able to comment on the specific circumstances of their scheme.

What happens when the PPF receives a notice of a company's insolvency?

When an insolvency event occurs we receive a formal notice called a section 120 notice from the insolvency practitioner if there is an occupational pension scheme associated with the employer. We then have 28 days from the day we receive this notice to confirm whether there has been a qualifying insolvency event. If we confirm that there has been a qualifying insolvency event, we will also confirm the date on which the assessment period began, which will be the date of that insolvency event.

Please can you provide me details of schemes that are in an assessment period and those that have been unsuccessful?

The Board is subject to certain restrictions on the information it may disclose under section 197 of the Pensions Act 2004. However, a list of schemes that are currently in an assessment period can be found here on the PPF's website.

* Source: Pension Protection Fund (http://www.pensionprotectionfund.org.uk" onclick="window.open(this.href);return false;)