Running a pension scheme can be complex and challenging. This is particularly true where the employer is in difficulty. It's important that as a trustee, you understand the sorts of challenges you’ll face when there’s an increased risk of your employer going bust. So we've published a new guide, Contingency planning for employer insolvency, to help you.
Here you'll find all the guidance you'll need to complete a valuation in line with sections 143, 152, 156, 158 and 179 of the Pensions Act 2004. Section 143 valuations This section is relevant for actuaries completing a valuation to determine a scheme's funding level.
Paragraphs 26 and 27 of Schedule 7 of the Pensions Act 2004 set out the circumstances in which the compensation cap applies and how and when it should be increased. In July 2021 the Court of Appeal ruled the PPF compensation cap was unlawful on the grounds of age discrimination, so we’re no longer applying it and we’re removing it from affected PPF pensioners. The information below is provided for advisers who still need to refer to previous calculation tables and factors.
We work with scheme trustees and their advisors when a sponsoring employer is in financial distress or facing a major change or ‘event’ – such as a restructuring arrangement or potential insolvency – which might trigger the entry of an eligible scheme into PPF assessment.
Here you'll find all the necessary valuation guidance and factors that were valid for previous periods. Please use the links below: Valuation guidance valid for previous periods
The circumstances in which early payment is possible are set out in Regulation 2 of the Pension Protection Fund (Compensation) Regulations 2005. Pension compensation calculation The amount of pension compensation payable early is calculated according to the table in the link below. This applies to all compensation determinations for early retirement with an effective date on or after 1 October 2022.
From time to time we consult on possible changes to our actuarial assumptions. You can find details of those consultations and their findings here. 2023 consultation on assumptions We are holding a six-week consultation on possible changes to the actuarial assumptions used for valuations carried out under section 143 and section 179 of the Pensions Act 2004.
The Pension Protection Fund (Compensation) Regulations 2005 permit the postponement of compensation and any separate lump sum in specified circumstances up to age 75. Pension compensation calculation The amount of pension compensation, payable late, is calculated according to the table in the link below:
In line with the equalisation of pensions, the Pensions Act 2004 requires our compensation to be paid on a basis that is no more or less favourable to a woman or man, in respect of pensionable service on or after 17 May 1990. In order to do this, our calculation of compensation has to take into account any differences in scheme benefits that are due to differences in the calculation of GMPs for men and women.
The circumstances in which commutation is possible are set out in Regulation 19 of the Pension Protection Fund (Compensation) Regulations 2005. How this option may be exercised is set out in Regulation 21 of the same regulations. The amount of lump sum payable, per £100 of compensation given up, is set out in the following table: Commutation factors from 1 March 2023
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