What does it mean?

Running_man

Hi
Couple of things I dont understand.One of those who thought pension was secure so never even looked at it (dumb i know)

If a pension scheme is wound up and the goverments ppf comes into place.What happens?
Do you have to wait till 65 normal pension age to recieve it?
Can you still draw pension from 50 ?can you still get lump sum?

What happens to people who are already recieving pension?As some who were in pension have been drawing it even though below normal pension age?

Hope someone can help

There is more about pension liabilities and shortfalls but will have to think how to word questions

jonathon_hart

Hi.

See this page http://www.pensionprotectionfund.org.uk/index/faqs/faqs_scheme_members.htm

it answers your question directly:

"If a member (aged 50 or over) has not retired prior to the scheme entering an assessment period he may apply to the trustees of the scheme for early retirement whilst the scheme is in an assessment period.
The trustees should then carry out two calculations.
1.Calculate the member’s pension entitlement under the scheme rules.
2.Calculate what the member would receive under the Pension Protection Fund. (This would include the use of admissible, rather than pension scheme, rules, following Pension Protection Fund rules for revaluation from the assessment date and application of the compensation cap, the 90% rule, and actuarial reduction).
The trustees should then bring into payment the lower of the two. Where scheme rules would not permit early retirement, the amount payable under the scheme rules will be £0 so the trustees would bring into payment the lower sum, namely £0."

So yes as long as the scheme rules allow it.

and your second question:

"
Where a member has taken early retirement and has not reached normal pension age, the fact that the member has commuted part of his pension for a lump sum will be taken into consideration, for the purposes of applying the compensation cap, when determining the compensation payable to the member from Pension Protection Fund. A member who is in receipt of a pension but has not reached normal retirement age is entitled to compensation at the 90% compensation level, which is subject to the compensation cap. Where a member has commuted part of his pension for a lump sum, in order to check whether the member's benefits are above the compensation cap level the first step is to work out the overall level of the benefit the member has received. If the overall level of benefit the member has received, taking into account the commuted lump sum, is in excess of the compensation cap, the lump sum will be taken into consideration when calculating compensation. Please view the FAQs for industry professionals for an example of how the Pension Protection Fund would calculate the level of compensation. If the member’s benefits, taking into account the commuted lump sum, do not exceed the compensation cap, the lump sum will not be taken into account when calculating the member’s compensation."

So you will still get protection under the PPF rules

Running_man

Much appreciated