Service at the heart of what we do

Despite the difficult circumstances, we’ve kept service at the heart of what we do. We’ve continued to beat our target of 90 per cent customer satisfaction, with 98 per cent of PPF and FAS members feeling satisfied with the service they’ve received.

Although our membership has grown, we’ve continued to surpass our targets, dealing with over 99 per cent of cases in under five days.

We’ve also successfully renewed our Service Mark, awarded by the Institute of Customer Service. Since we first applied for the Service Mark, we’ve shown consistent improvement across both our member and staff survey scores.

In this section

Supporting our vulnerable members

Over the past three years of the strategic plan, we’ve concentrated on making our service as accessible and straightforward to use as possible for members with additional needs, disabilities or other vulnerabilities. Having introduced a number of measures, we’ve recently commissioned external research into the service we provide to our vulnerable members so that we can learn what people might need and make sure we fill any gaps.

We aim for best practice in all areas of customer service and work with other organisations to learn and share our knowledge about service for vulnerable customers.

98% member satisfaction score

 

Training and awareness-raising
As well as raising awareness across the organisation, all our member-facing teams are trained on how to help vulnerable members access our services. We have a vulnerable members working group made up of staff from different departments.

We regularly update what we’re doing on our intranet and recently ran a lunch and learn event attended by more than 80 people.

Suicide prevention
It’s a challenging topic, but we occasionally receive calls from people who are expressing suicidal thoughts. To help prepare our teams when this happens, we’ve created an e-learning training module that will mean our people are better able to support those rare calls that come through to our contact centre.

Providing documents in Braille
We now have the ability to provide all of our documents in Braille and large fonts for blind or visually impaired members. This was developed in response to the needs of members of a particular scheme that transferred to us, but is now a facility that is open to everyone.

We also check with all schemes in assessment that may transfer to us whether their members have any additional needs we should be ready to meet.

Power of attorney
When members want someone else to deal with us on their behalf, they can download a letter of authority’ form from our site. This is useful in a number of different circumstances, including for members living with dementia.

We’ve also provided training for our member services team in powers of attorney so that our members’ representatives have a good experience when they’re dealing with us. We know that often they’ll be under pressure trying to look after their relatives, alongside all their other life responsibilities, so we want to support them in doing so.

One new way we do this is by letting those with power of attorney know that they can register on our member website on behalf of the member they’re supporting, so they can make changes or contact us online at a time that suits them.

Making our website work for everyone
Our member website already meets accessibility standards and we continue to improve on this. As some members with additional needs prefer to communicate via our website’s secure message function, we’ve improved this functionality.

Now, if a member sends us a secure message, we send them an email to their personal email account to tell them we’ve replied. In future, we may introduce a web chat function if this is something our research shows will benefit vulnerable members. 

Legal challenges to the compensation we pay

As we reported in our last Annual Report and Accounts, in July 2021 the Court of Appeal ruled in the Hughes case that we are entitled to perform a one-off calculation approach for increasing payments to the 50 per cent minimum level. This was determined in 2018 by the Court of Justice of the European Union’s ruling in the Hampshire case.

It also confirmed that the PPF compensation cap, as set in legislation, is unlawful based on age discrimination and has to be disapplied.

Since then, we’ve continued to make progress:

  • We paid arrears due to those FAS pensioners who’d already received an increase due to Hampshire, ahead of our target of the end of 2021.
  • We no longer apply the cap to new PPF retirees.
  • We’ve started the process to remove the PPF compensation cap and scale up payments.
  • We’ll start to make uplifts this summer with a view to completing the majority by the end of 2022.


Our objective is to return members to the position they’d have been in if they’d never been capped and always received payments of at least the 50 per cent minimum level. To support that objective, in December 2021 we announced that we won’t put a time limit on payments due; we’ll pay arrears from the time affected members started to receive PPF compensation.

We also agreed to offer lump sums to those members who retired after the date their scheme entered a PPF assessment period, and to pay some or all of the unauthorised payments charges to HMRC that would otherwise be payable by members.

FAS members
Although the FAS cap wasn’t affected by the Court of Appeal’s ruling, some members are entitled to increased FAS assistance to make sure that they receive 50 per cent of the value of their accrued old age benefits, as required by the Hampshire judgment.

The DWP has confirmed that it will not put a time limit on the payment of Hampshire arrears for members. It also confirmed that interest won’t be paid on the arrears, because there’s no legal basis to do so.
 

Uncapping is a complex process

We’ve been working hard to plan how we will implement the Hughes ruling. Determining the correct amount each affected member should be paid, and any arrears due to them, is very complex work, particularly given individuals’ specific tax circumstances where we‘ve agreed to offer a lump sum and pay the tax charges on behalf of the member.

Sue Rivas, our Director of Scheme Services, explains that the process of removing the compensation cap will take some time to complete:

“I’m really pleased that we’re now processing members and have started to remove the PPF cap. But it’s going to be a long and complicated piece of work to complete. Uncapping is a complex process, particularly for those members who’ve already received a Hampshire increase, and we expect that it’ll take until the end of 2022 before we’re able to disapply the cap for the majority of currently-capped PPF pensioners.

“I understand that it’s a frustrating time for affected PPF capped pensioners, especially those who haven’t heard from us yet. We’re working through our processes as quickly as possible.”
 

Fraud Compensation Fund

Since November 2020 when a court ruling clarified that occupational pensions schemes set up as part of a scam were eligible to claim on the FCF, we’ve been working hard to process and validate the claims received to date.

For each claim, we assess:

  1. Whether there has been an incidence of fraud;
  2. What reduction in scheme assets has resulted from the fraud; and
  3. Whether the loss of scheme assets occurred as a result of the fraud or for other reasons.


We’ve making progress and have paid the first of the 13 claims received so far (for further details see page X). It has been a year of learning, in which we’ve focused on getting the process right and expect to increase the pace of processing as the new approach beds in. We anticipate further claims applications to be made in 2022/23.

We raised an FCF levy of 75p per member (30p for master trusts), which we expect to be sufficient for the next year, but, as we reported in our 2020/21 Annual Report and Accounts, in order to fund all potential claims we require a loan from the DWP. The loan has now been approved and signed, and will be repaid by the end of 2030.

In the autumn of 2021 the Department for Work and Pensions consulted on raising the FCF levy ceiling to £1.80 per member (65p for master trusts). The legislation to enable this came into force on 1 April. We confirmed that we’ll raise a levy in 2022/23 at this higher rate; we expect this higher levy will generate £37m, putting us in a good position to continue paying the claims we expect to receive.

Brilliant service for schemes

£475m PPF levy collected

With many businesses still struggling from the impact of COVID, we know this is a challenging time for the schemes we protect. In response, we’ve introduced some policies to help ease the burden on levy payers.

Our levy payers sponsor a total of 5,220 schemes, comprising 9.7 million members. While more than half of these schemes are underfunded, we’ve recognised that there needs to be flexibility within the levy rules for schemes that pose less risk.

The new ‘small scheme adjustment’ now halves the levy for those with under £20 million in liabilities. The reduction is tapered so that only schemes with £50 million or more in liabilities are charged in full.

We’ve also cut the cap on the amount of levy paid by any individual scheme – the risk-based levy cap – from 0.5 per cent of scheme liabilities to 0.25 per cent, protecting those most at risk of seeing increases in levy bills.

Finally, we extended our COVID easement plan this year, offering levy payers an extra two months to pay without incurring interest. In practice, a minimal number of schemes took this up, and we collected 95 per cent of the outstanding uncontested 2021/22 levy by 31 December 2021.

For 2022/23 – the next levy invoices to be issued – we’ve allowed the levy to decrease again so that more than 80 per cent of schemes will see a reduction in their bill. We’ve also capped 2022/23 invoices so that none of the few schemes seeing increases will pay more than 25 per cent than they did in 2021/22.

This one-time measure recognises the extent to which forced closure of businesses during the pandemic has resulted indowngrades in insolvency risk scores.

94% average levy payer satisfaction


We’re pleased to have exceeded our target of 80 per cent customer satisfaction this year, with over 94 per cent of levy payers feeling satisfied with the combined customer services offered by the PPF and D&B.

Developing digital services
We’ve reviewed and improved how we deliver our digital services over the past three years to improve communication and help make the levy calculation and payment process as painless as possible.

Behind the scenes, we’ve been implementing new processes, protocols and tools to drive progress. As a result, we’ve introduced new electronic invoices, improved online consultation functionality and our new portal. The system has been vastly improved over the course of the Strategic Plan period and is aligned with industry standards.

A key milestone was putting our insolvency risk scoring services out to tender, with the ability to deliver better online services a key factor in our decision-making process. D&B won that tender, and together we’ve provided a new, improved portal where levy payers can check their scores and get online help with their queries. However, we know it doesn’t yet offer the seamless service our levy payers want, and we’ll be improving the portal further over the new Strategic Plan period.

Thanks to our improved digital services, we issued invoices, including electronic invoices, in record time in September.

Responding to feedback
We know that schemes don’t choose to use our service, but this reinforces our ambition to listen carefully to what levy payers want, understand where we can do better, and then take action.

In addition to our annual consultation on our levy approach, over the past three years we’ve introduced biannual structured SME Forums, along with ongoing informal meetings, surveys, focus groups and email newsletters to gather feedback and share information.

These communication channels have been incredibly valuable and helped shape our current levy rules, the introduction of the small scheme adjustment and the reduction to the risk-based levy cap.

Asset class consultation
In April 2021 we published a consultation, jointly with The Pensions Regulator (TPR), setting out proposed changes to the asset class information to be provided annually by DB schemes. The changes aimed to better capture data on investment risk without resulting in an excessive administrative burden on schemes.

We received 29 responses to the online consultation, with wide support for revising and updating the asset class information collected and the need to collect more detailed information on bonds.

Applying the levy to pension superfunds
Commercial consolidators – also known as superfunds – are a recent development in the pensions world where the assets and liabilities of multiple defined benefit pension schemes are consolidated into one larger scheme. As they’re structured differently, we’ll need to calculate their levy in a different way.

We’ve now developed rules that will apply the levy fairly to these funds, so we’re ready to react as they – and potentially other new types of structures – are formed. We’re also committed to developing these rules further as the market develops. 

Case study decoration

It was a real blessing when the PPF took over

“When Carillion went bankrupt, I was concerned because they had taken the pension provision of my former employer, Mowlem. I had quite a good final salary pension scheme with them, so obviously I was worried about what would happen to it now.

"I appreciated that the PPF were quick to write to me and tell me what was happening. It was a real blessing when they took over.

“Even though I’m eligible, I’ve not yet started taking my benefits. I have thought about it and had independent advice on the pros and cons.

“I’ve used the Benefit Modeller on the PPF website to work all sorts of different permutations and options if I retire at different times and with
different drawdowns. That’s been a real help, and because it’s so easy to use and informative, it’s by far the best comparison tool from all of the pensions I have.”

Neville

West Yorkshire

Securing the best outcomes for overfunded schemes in assessment

The collapse of any employer with a DB pension scheme is an extremely stressful time for its members. We know that people need certainty about their future as soon as possible, whether that means transferring to us, or not.

We’ve seen a trend of schemes entering assessment with enough assets to buy higher benefits for members than we would pay, which means they can secure a buyout with an insurance company. Although our processes were originally designed to support members from underfunded schemes, we’ve used our experience and expertise to introduce new ways of supporting these better-funded schemes too.

One of the key actions we’ve taken is to appoint a panel of buyout experts that can help schemes secure an insurance company buyout faster, as we work with the panel to develop standardised processes, timeframes and costs. Historically, this has sometimes been a time consuming and costly process with a huge amount of uncertainty for members. The specialist panel will provide consistency and efficiency to the process. Our aim is for these schemes to exit the PPF assessment period as seamlessly as possible and ensure they secure the best possible outcome for members outside the PPF.

Strategic priority

The best of financial and public services culture

The best of financial and public services culture