Pension crisis coming to UK....

The Pension Protection Fund (PPF) is not the panacea that many believe it to be. It serves only to help defined benefit schemes (in the main).

That it is not a panacea is particularly true for scheme members who have yet to reach their Normal Retirement Date and whose scheme is accepted into the PPF (after the sponsoring employer has suffered a qualifying insolvency event and the scheme has undergone a successful assessment period). For these members, the PPF does not match the pensions that would have been payable had the original scheme survived.

Any scheme members of a defined benefit scheme worried about the sponsoring employer's finances would do well to take time to visit the PPF's website and become familiar with what it might pay - you may be unpleasantly surprised.

Any advisers telling clients that the PPF guarantees pension benefits in the event of scheme failure had better dust off their professional indemnity policies.

Give what I've said above, the cover that the PPF provides (if a scheme qualifies) is better than no cover at all.

Mike Jones

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser.

TRUSt_NO_1 wrote: »

Do you mean like the vultures who bought MG/Rover for a £1 ? ...They sure didn't pick up their pension liabilities...You, me and every other UK tax payer is paying for that.

MG Rover Group Pension Scheme was transferred into the Pension Protection Fund in March 2007 following a successful Assessment Period.

When the Assessment Period began, the PPF website reported:

The MG Rover Group Pension Scheme has 6004 deferred pensioners and 232 pensioners. The MG Rover Group Senior Pension Scheme has 96 deferred pensioners and 4 pensioners.

The Pension Protection Fund, which became operational on 6 April 2005, was set up under the provisions of the Pensions Act 2004. The Board of the Pension Protection Fund is a statutory corporation. It has been established to pay compensation to members of eligible defined benefit and hybrid pension schemes when there has been a qualifying insolvency event in relation to the employer, and where there are insufficient assets in the pension scheme to cover Pension Protection Fund levels of compensation.

Hence, other than the normal tax reliefs on pensions which all UK residents can avail themselves of, no taxpayers money will have yet paid towards the retirement provision of members of that or any other scheme that has transferred to the PPF.

Mike Jones

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser.