The Pension Protection Fund

The Pension Protection Fund (PPF) was established on 6 April 2005 as a statutory fund to pay compensation to members of underfunded defined benefit occupational pension schemes whose sponsoring employer has become insolvent.

The statutory provisions governing the operation of the PPF are contained in the Pensions Act 2004 (PeA 2004), ss 107–220 and Sch 7, and underlying regulations.

For an outline of the operation of the PPF as a statutory compensation fund and how it interacts with defined benefit and hybrid occupational pension schemes, see Practice Note: The Pension Protection Fund—an introduction.

Entry and eligibility

Schemes must satisfy certain statutory requirements to be eligible for entry into the PPF. In particular, a scheme must be an eligible scheme, and a qualifying insolvency event must have occurred in relation to a sponsoring employer.

Not all schemes are eligible for entry into the PPF, eg money purchase schemes or schemes in winding-up immediately before 6 April 2005. Certain other types of scheme are specifically excluded from entry into the PPF.

The PPF will also only assume responsibility for a scheme if the scheme's assets

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Pensions News

PLSA responds to FRC's UK Stewardship Code Consultation

The Pensions and Lifetime Savings Association (PLSA) has submitted a response to the Financial Reporting Council's (FRC) consultation on proposed revisions to the UK Stewardship Code. While welcoming efforts to streamline reporting requirements, the PLSA expresses concerns about the proposed new definition of stewardship, which omits explicit references to 'environment' and 'society'. The PLSA argues that this change risks diluting stewardship standards at a time when environmental and social considerations are increasingly important. The PLSA emphasises the voluntary nature of the Code and its role as a beacon of best practice, urging the FRC to maintain robust stewardship standards in line with the government's commitment to sustainable finance and the green transition.

TPR improves oversight of largest DC schemes to enhance member outcomes

The Pensions Regulator (TPR) has announced improvements in its supervision of master trusts and defined contribution (DC) schemes, following a 12-month review. TPR’s new approach splits schemes into four segments of supervision with tailored levels of engagement, aiming to identify risks sooner and improve saver outcomes. These segments include, monoline, commercial and non-commercial master trusts, collective DC schemes as well as single and connected employer DC schemes. TPR’s key focuses include ensuring that all savers receive value for money and establishing clear priorities around investments, data quality, and innovation at retirement. For larger schemes, dedicated multi-disciplinary teams will be assigned, facilitating more targeted, expert-level interactions. This shift represents a move towards a more prudential regulatory style, addressing both scheme-specific and market-wide risks in the UK pensions landscape.

Pensions weekly highlights—20 February 2025

This week's edition of Pensions weekly highlights includes a review of key news stories, as well as dates for your diary and trackers.

HM Treasury confirms first top-up payments for tax year 2024-25

HM Treasury has confirmed the implementation of legislation introduced in 2023 to address the disparity in tax relief between relief at source and net pay workplace pension schemes for low-paid workers. The policy aims to provide approximately one million individuals in net pay schemes with an annual top-up payment of around £70, ensuring similar outcomes regardless of the pension scheme type. HM Revenue and Customs (HMRC) is currently developing an IT solution to identify eligible individuals and facilitate these payments. The initiative will commence with the 2024-25 tax year, with the first payments expected to be offered to eligible individuals in 2026.