In July 2021 the Court of Appeal ruled the PPF compensation cap was unlawful on the grounds of age discrimination. They supported our approach to increasing payments to PPF and FAS members following the 2018 European Court of Justice judgment in the Hampshire case. We’ve been working on how to implement it.

Progress so far – PPF capped pensioners 

The Board had already confirmed that, as we remove the compensation cap from affected PPF pensioners, our general approach will be to offer the option of a lump sum to those members who retired after their scheme’s assessment date as well as increase and pay arrears on monthly compensation.

However, we still need to finalise whether we’ll put a six-year time limit on these payments. We’ll make an announcement on this as soon as possible.

While we finalise this question, we’ll start writing to members who retired after their scheme entered assessment, to gather information about their Lifetime Allowance. 

We don’t need extra information from members who retired before their scheme entered assessment. We’ll be in touch with those members once we’ve calculated their increase. Members don’t need to contact us. 

Progress so far – FAS capped pensioners

The FAS cap wasn’t affected by the ruling on the PPF compensation cap, but some FAS members are entitled to an increase to make sure that they receive 50 per cent of the value of their accrued old age benefits.

We’d already increased the payments to some FAS members, but hadn’t paid them arrears in case the court told us to take a different approach. 

We’re the scheme manager for FAS on behalf of the Department for Work and Pensions, and we administer the scheme according to their instructions. DWP is still considering whether to apply a six-year time limit to the payment of arrears for FAS members. So for now, we’ll limit arrears.

Now that our approach to providing the 50 per cent minimum level of protection has been confirmed by the Court of Appeal, we’re starting work to pay the arrears due, and expect to pay them by the end of 2021. 

Progress so far – uncapped PPF and FAS pensioners

There are some PPF and FAS members who weren’t capped but we believe are affected by the ruling because their compensation fell below 50 per cent for other reasons. We’ve started collecting data and working on a model to calculate the increases due. We hope to be able to pay the increases due in the majority of cases by December 2022, although it may take us longer to process those with more complicated circumstances. 

More information

Read our FAQs for PPF and FAS members for more information.

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