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 ruling, and to the lawfulness of the PPF compensation cap.
On 22 June the court ruled that our approach of making a one-off calculation is permissible. However over the course of their lifetime each individual, 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.
The ruling found that the PPF compensation cap is unlawful on grounds of age discrimination.
We lodged an appeal on 20 August against the ruling on
- the approach we may adopt to meet the requirement for members to receive 50% of the value of their entitlement
- how survivors’ benefits should be dealt with
The Court of Appeal will have to decide whether to agree to let us proceed with the appeal. We don’t know when we’ll find out if we can proceed or when the hearing might take place. We’ve asked for it to be dealt with as soon as possible.
Until we know more, we’ll continue to pay our members their current level of benefits.
The government sets the level of compensation we pay, balancing the needs of members and the needs of our levy payers. The Department for Work and Pensions (DWP) has lodged an appeal against the ruling on the cap. Until we know more, we’ll continue to apply the cap according to the current levels set by DWP.
There's been media speculation that the result of the judgment could have a knock-on effect on members whose compensation has been fixed at 90% because they hadn’t reached their normal pension age when their employer failed. The 90% measure wasn’t tested in this case although the court did comment that the impact on those affected, although significant, doesn’t render the measure inappropriate or unnecessary. Like the compensation cap, the 90% measure is set for us by DWP and the government, balancing the needs of members and the needs of levy payers.
You'll find regular updates about the progress we are making in our latest news section.