Following the judgment of the Court of Justice of the European Union (CJEU) last month, we have started to write to capped members who we believe are affected by the ruling. This is to confirm our records, because we do not have all the data we need to calculate the increase due. We will be writing in tranches over the coming weeks, so members who believe they are affected, but do not receive a letter immediately, do not need to contact us.
Once we have written to capped members, we will begin to contact members approaching retirement age who we believe will be capped, schemes in assessment and any other remaining non-capped members who we believe may also be affected.
We have been working with the Department for Work and Pensions (DWP) about the changes that may result from this judgment. For those members affected, we will work to implement the judgment as quickly as possible.
The vast majority of PPF and Financial Assistance Scheme (FAS) members will already receive compensation in excess of 50 per cent of their accrued old age benefits and we expect the number of eligible members affected by this ruling to be very small.
We continue to work closely with the Department for Work and Pensions (DWP) to make sure our approach is likely to be consistent with the necessary future changes to legislation. In advance of legislation, we are putting in place an interim process to uplift payments now:
- We will value the benefits that the eligible PPF member expected to receive from their scheme at the point of their PPF assessment date. We will value the member’s PPF compensation from the same date.
- Where we find the PPF compensation is less than 50%, we will increase the headline level of our compensation payments until the total value is at least equal to 50% of their expected pension. Existing PPF indexation/revaluation rules will apply to this increased headline amount. We anticipate that this will be a one-off change needing no further adjustment.
- We are the scheme manager for FAS on behalf of DWP and administer according to their instructions. Where we find FAS assistance is less than 50 per cent we will increase standard assistance. For the time being, the process will only capture members of FAS insolvent schemes.
We continue to work to implement the judgment as quickly as possible.