Thumbnail

Since our last update in December new court proceedings have started against us, seeking to challenge, among other things, our intended approach for calculating any increases due to our members as a result of the ruling.

In November 2018 we set out our plans for calculating and paying increases to members affected by the CJEU ruling. The ruling stated that pension scheme members should receive at least 50 per cent of the value of their accrued old age benefits if their employer became insolvent. 

What is the impact of these court proceedings?

We’ve thought carefully about whether we should stop all work to implement the ruling in light of the new court proceedings. For the time being, we’ve concluded that it's right to continue with our plans to pay increases to affected members.

However we currently intend to limit the size of arrears payments. This is to avoid the risk of having to recover overpayments from members should the court decide we must take a different approach to calculating the increase.

We expect our proposed approach to lead to higher payments in the near term than some of the alternatives the court is being asked to consider. Interest will continue to accrue on the arrears.

At this time we can’t say when the court case may start or end, although the court may be asked to deal with the case quickly. We will keep our approach to implementation under review in the light of how the proceedings develop.

How we plan to implement our approach

We continue to work through the technical aspects of our approach to calculating increases, but this this is how we plan to approach implementing the judgement:

  • We’ve decided how we’ll deal with survivor benefits. We intend to include them in the valuation of a member’s scheme benefits so that the survivor, where there is one, will receive 50 per cent of the member’s, adjusted, PPF compensation in the normal way.   
  • We’re also continuing with our plans to make payments to members who are likely to be affected most. We hope to be able to make payments in the next couple of months to the initial group of affected members whose compensation has been adjusted for the long service cap. 
  • We’re in the process of writing to all long service cap members to let them know whether or not they are being considered for an increase at this stage.
  • We’ll then start to look at  members who’ve had their compensation capped. We’ll write to those members who we think are most likely to be affected to ask them to send us information to help us work out if any increase is due. We hope to be in a position to make those payments during summer 2019.
  • We’re also working to identify those members who are coming up to retirement and might be affected by the ruling. We’ll write to those members for further information, if we need to. 

You can find further detail about our approach in the frequently asked questions document we've written to answer  questions members have been asking us.

We continue to discuss our plans with the Department for Work & Pensions, particularly in relation to FAS as there are some differences in the approach, due to the nature of the schemes. Read our frequently asked questions document for FAS.