Carillion Rail (GTRM) Pension Scheme becomes 1000th scheme to transfer to the PPF
Without the PPF’s involvement, member benefits would have almost halved
The PPF now manages £32 billion of assets for close to 260,000 members
The retirement benefits of almost 4,000 members of the Carillion Rail (GTRM) Pension Scheme (“the scheme”) have been secured following its transfer to the Pension Protection Fund, the body that protects members of UK defined benefit pension schemes. The scheme becomes the 1,000th to transfer to the PPF since it was established in 2005.
Members that were over the scheme’s normal pension age at the time of insolvency will receive 100% of what was in payment at that time, and those under that age will receive 90% subject to a cap. Without the PPF, members of the scheme would have received a share of the assets following the insolvency of the sponsoring employer amounting to 55% of their promised pension.1
The PPF now manages £32 billion of assets for close to 260,000 members located across the UK and globally. Currently, PPF membership is split between almost 155,000 already receiving their pensions and close to 105,000 members who will start their payments in future. The PPF offers award-winning customer service, with a 97% customer satisfaction rating from its members.
Commenting on the transfer of the Carillion scheme, one member, John Brown, 75, from Ormskirk in Lancashire said:
“When Carillion fell apart, the suggestion was that things could either go to an insurance company or to the Pension Protection Fund. I’d kept my finger on the button with what had been going on so I knew that there was a possibility this would happen. When it did happen, I was pleased because I thought we could draw a line under the debacle and move on.
“I’ve got nothing but praise for the PPF so far. The website, the member information pack, and the explanations that the PPF has given have all been top quality. It’s reassuring to find out the pension has gone into my account and I’m really pleased with everything. Ten out of ten.”
Steven Masters, 65, from Warwickshire first heard about the Pension Protection Fund several weeks after Carillion went into liquidation. His initial fears of having his pension transferred over to the PPF were quickly addressed. He commented:
“I was obviously a bit nervous about my pension being transferred. When you first hear about it, you worry whether you’ll be paid the right amount at the right time. But when I spoke to the PPF team I felt quite happy that my pension was safe. Everything was explained to me during the assessment period and I’ve been kept very well informed ever since. Overall, I’ve had a very good experience as a PPF member - a happy customer.”
Oliver Morley, Chief Executive Officer, PPF, said: “The transfer of the 1000th scheme marks a significant milestone in protecting close to 260,000 members who have come to the PPF following a company insolvency. While the arrival of the 1000th scheme represents a lot of insolvencies and change for our members, it shows the value of the PPF and that the legislation put in place to protect our members makes a real difference to people’s lives.”
The PPF is an independently run public corporation that exists to protect members of UK defined benefit pensions when their employer fails and their scheme is unable to pay them what they were promised. PPF benefits paid to members and the cost of running the PPF are paid for through levies on eligible pension schemes, income from its own investments, taking on the assets of schemes that transfer to the PPF, and recovering money, and other assets from insolvent employers of the schemes it takes on.
1The assets of the scheme are £276m versus PPF liabilities of £388.5m.
2The Railways Pension Scheme is made up of many sections, sponsored by non-associated employers which included sections sponsored by Carillion plc.
The funding level or financial strength of one employer’s section is therefore not a reflection of other sections.
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