Retirees set to benefit from DB lifeboat fund’s surplus

PFF pensionsThe Pension Protection Fund may look to distribute its surplus funding to people tipped into it following the collapse of company retirement schemes if it meets its financial self-sufficiency target.

The lifeboat fund for defined benefit pension schemes is aiming to achieve financial self-sufficiency by 2030.

According to a Financial Times report, PPF chief executive Oliver Morley says there is “every chance” affected retirees will see some funds redistributed.

The PPF currently supports more than 240,000 retirees including members of the collapsed BHS scheme and is financed by a levy paid by the UK’s 6,000 DB pension schemes that are backed by companies.

The value of the surplus is unknown, although inflows are expected as more companies tied up in collapsed DB transfer schemes are placed into liquidation.

Along with PPF members, those in retirement schemes who pay the lifeboat’s levy will be in line for payouts.

Retirees not recklessly spending pension wealth

Morley says the PPF board will examine options for distribution over the coming year.

He says: “We are looking to develop a new strategic plan, and this is one of the things that I want to work on.

“If the PPF delivers on its plan, there is every chance that a surplus will be available for potential redistribution.”

Redress would be a welcome benefit to PPF members yet to retire, who are facing a 10 per cent cut to the retirement benefits assured to them by their ex-employers.

The PPF collected a total of £537m in levy payments from the estimated 6,000 DB schemes that could be transferred into it in the last financial year.

Funds under management currently sit around £30bn.

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