A scheme won’t transfer to the PPF if:
- it’s rescued – for example, a new employer takes on responsibility for the scheme, or
- it has enough assets or money to buy benefits with an insurance company, which are at PPF compensation levels or above.
If your scheme goes into the PPF, you will get a guaranteed minimum level of compensation.
If you’ve passed your scheme’s normal retirement date, your pension will be paid in full. This also usually applies if you retired through ill-health or if you are getting a pension in relation to someone who has died.
If you’ve retired early or have yet to retire, you’ll receive a pension equal to 90% of the value of the one you were promised.
From 6 April 2017, the long service cap came into effect for members who have 21 or more years’ service in their scheme.
For these members, the cap is increased by 3% for each full year of pensionable service above 20 years. This is up to a maximum of double the standard cap.
Annual increases in compensation might be different to the increases you would have got from your pension scheme.
In September 2018, the Court of Justice of the European Union ruled that individual PPF and Financial Assistance Scheme (FAS) members should receive at least 50% of their pension.
This ruling is only expected to affect a few PPF/FAS members. These people were contacted from 2019 onwards.
The PPF was set up by the government in April 2005. If you were a member of a defined benefit pension that started to be wound up between 1 January 1997 and 5 April 2005, you might be protected by the Financial Assistance Scheme (FAS).