Pension Protection Fund chairman elect Lawrence Churchill says the Government has learned valuable lessons from the US about the design of the PPF.
Speaking at last week's PMI autumn conference, Churchill said the PPF will give greater importance to the risk-based levy than its US counterpart, meaning that the schemes most likely to claim will contribute the most. He also stressed the importance of the PPF's status as a non-departmental public body at arms length from the Government.
Churchill identified three factors he feels are key to the success of the PPF – confidence and consensus building, risk management and early warning systems – and the emergence of strong funding standards.
He concluded by saying that the concept of compensation for defined-benefit schemes has received overwhelming support and while the Parliamentary process required to establish the PPF is still ongoing, the compensation issue is being addressed as a matter of urgency.
Churchill said: “The PPF's function will be to pay the right amount of compensation to the right people at the right time and this should improve confidence in defined-benefit schemes.”