When the Pension Protection Fund (PPF) recently committed to making its first ever payments in the UK as part of a compensation package worth £2.5 million to 210 former employees of textile manufacturer Chilton Scotland, it signalled the end of an 18 month exercise. The journey proved to be something of a voyage of discovery as processes were developed and approaches evolved to fill in the detail around the regulations. Having now reached the end of the road it does give us a chance to review what’s been achieved and see if any lessons can be learned. Read more »
Posts Tagged ‘Pension Protection Fund’
The Board of the Pension Protection Fund (PPF) has published its final proposals for the calculation of the PPF levy. The levy comprises two elements, a scheme based levy, calculated as a percentage of the scheme’s liabilities on a basis prescribed by the PPF, and a risk based levy calculated by reference to the risk of insolvency of the scheme sponsor and the underfunding risk in the scheme. The risk based element makes up 80% of the levy and is based on failure scores provided by Dun & Bradstreet which reflect the likely risk of insolvency of a business in the next 12 months. Read more »
The introduction of new pensions legislation this year seems only to bring good news and opportunities for those insolvency practitioners who are prepared to become involved.
The first bit of welcome news is that following the introduction of Pensions Act 2004 from April 2005 Insolvency Practitioners no longer need to make a statutory appointment of an Independent Pension Trustee to the pension scheme. This move could result in IP’s taking even less of an interest in pension issues however to adopt this approach is not without risk and to do so I believe is to miss out on significant new opportunities. Read more »
From April 2005, most members of final salary schemes, and their families, will be able to sleep that bit more peacefully at night, secure in the knowledge that the level of protection from their pension benefits has increased substantially.
That comforting blanket of security comes courtesy of a couple of legislative changes: recently passed legislation making it more difficult for solvent employers to rid themselves of their final salary pension schemes without securing the full entitlement of members, and the introduction of the Pension Protection Fund which will provide a high degree of protection should employers become insolvent. Read more »