Pensions - Articles - PPF are right not to wait for legislation

 The effect of the PPF cap, together with other features of the PPF system, can mean that workers whose scheme enters the PPF can end up in some cases with less than half of the pension they would have received had the employer remained solvent. The PPF has announced it will be contacting members potentially affected in an announcement here: 

 Commenting, Steve Webb, Director of Policy at Royal London, said: “It is right and proper that the PPF is putting in place plans to increase the pensions of those who have lost the most when their employer went bust. Given the pressure on Parliamentary time, it could be months, if not years, before legislation could be passed to change the rules on PPF compensation. In the meantime, many of these workers would have to get by on far less than they had originally expected. It is good to see the PPF moving ahead and it is to be hoped that comprehensive legislation to address this anomaly will not be far behind”.

 The PPF has indicated that it will undertake an ‘actuarial valuation’ of the pension rights a worker could have expected to get from their scheme if it had continued to operate compared with the compensation that would be paid through retirement by the PPF. Where the compensation is less than 50% of expected scheme benefits there will be a one-off uplift in compensation at the point of entering the PPF.