View more on these topics

Govt reviewing Pension Protection Fund compensation cap

Steve Webb 480 LibDems DWP

The Government is reviewing the structure of the Pension Protection Fund compensation cap to reflect how long an employee has worked for a company.

The PPF is a lifeboat fund for members of defined-benefit pension schemes whose sponsoring employer has gone bust.

Currently if an individual’s employer fails before they reached retirement age, they will receive compensation worth 90 per cent of the value of their pension at the time. This figure is capped at £34,049.84 per year.

A Department for Work and Pensions spokesman says: “We are reviewing the structure of the Pension Protection Fund compensation cap, in particular the feasibility and cost of reflecting length of service when calculating the cap to apply to individuals.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Sounds reasonable. Why should an employee that enjoys accelerated accrual and high superannuable pay benefit to the same extent as employees of long service.

    Although to be fair as long as the taxpayer is not acting as a long stop, I don’t really care that fully funded DB schemes are subsidising the backsliders, more fool them. Personally I don’t think that employees really even now appreciate the costs involved. I hear talk of 30% of salary as a contribution to match maintain DB benefits. I wouldn’t be surprised if it’s more like 50% and that’s for Career average.

  2. Not to worry, just add an additional levy to IFA’s as always happy to pick up the bills for others mistakes and losses

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com