In 2018, the European Court of Justice ruled that individual members should receive at least 50 per cent of the value of their accrued old age pension if the employer responsible for funding the scheme they’ve paid into fails.
The vast majority of PPF and Financial Assistance Scheme (FAS) members already receive compensation in excess of 50 per cent of their accrued old age benefits.
This means the number of members affected by this ruling is very small.
Frequently asked questions about the ECJ ruling
Below you'll find information to help you understand the ruling and find out how it will impact you.
Frequently asked questions for PPF members
Get help with the most common questions on the ruling for PPF members
Frequently asked questions for FAS members
Get help with the most common questions on the ruling for FAS members
The latest updates on the ECJ ruling
In May 2020 the Administrative Court heard a challenge brought against us by a number of members to the way we’re implementing the ECJ’s Hampshire ruling, and to the lawfulness of the PPF compensation cap.
On 22 June 2020 the court ruled that over the course of their lifetime each member, and separately each survivor, must receive at least 50% on a cumulative basis of the actual value of the benefits that their scheme would have provided. This would have required some changes to our approach of making a one-off calculation.
The ruling found that the PPF compensation cap was unlawful on grounds of age discrimination.
We lodged an appeal on 20 August 2020 against the ruling on:
- the approach we may adopt to meet the Hampshire requirement for members to receive 50% of the value of their entitlement
- how survivors’ benefits should be dealt with
The Secretary of State for Work and Pensions (DWP) lodged an appeal against the ruling on the cap.
We received the judgment from the Court of Appeal on 19 July 2021. The Court supported our one-off calculation approach for increasing payments to PPF and FAS members. It also confirmed the High Court’s decision that the PPF compensation cap, as set in legislation, is unlawful based on age discrimination and has to be disapplied. The FAS cap was unaffected by the decision.
The Secretary of State for Work and Pensions has confirmed to the court that she will not appeal the ruling on the cap. The respondents have confirmed that they will not appeal further on the approach to calculating the Hampshire 50% minimum. We’ve now started work to implement the judgment.
You'll find regular updates about the progress we are making in our latest news section.