Winding up
This section contains a summary of how the existing provisions relating to a scheme that winds up will change under the Pensions Act 2004. Further summaries set out the circumstances in which an underfunded scheme will 'tip into' the Pension Protection Fund or, if applicable, the Financial Assistance Scheme.
The different sections included are:
Admission to the Pension Protection Fund
Probably the most widely-discussed provision of the Pensions Act 2004 is the Pension Protection Fund (PPF). Its purpose is to ensure that members of occupational pension schemes can be assured that they will receive at least a minimum proportion of their accrued retirement benefit, if their employer’s business fails. A scheme is ‘eligible’ for admission to the PPF only where some or all of the retirement provision is in the form of defined benefits.
Read the full factsheet
Version: 2
Date: April 2005
Financial assistance scheme
The Pensions Act 2004 will establish a scheme that offers 'financial assistance' to members whose benefits have been cut back as a result of the insolvent winding up of their occupational pension scheme, but who are not entitled to benefit through the Pension Protection Fund.
Read the full factsheet
Version: 4
Date: May 2006
The Pension Protection Fund benefits
The Pension Protection Fund (PPF) aims to provide a minimum level of benefits for members of underfunded schemes where the sponsoring employer has become, or is at serious risk of becoming, insolvent after 5 April 2005.
Read the full factsheet
Version: 5
Date: May 2006
Winding up and employer debt
The Pensions Act 2004 amends the order in which an underfunded scheme must allocate assets when it begins to wind up, aligning it more closely with the benefits payable from the new Pension Protection Fund. The Government is also strengthening the calculation of the debt that falls on an insolvent employer when an underfunded scheme begins to wind up when the employer is insolvent, and when a solvent employer withdraws from a multi-employer scheme.
Read the full factsheet
Version: 6
Date: May 2006
This note gives a broad outline of the provisions. Action should not be taken on the basis of the information provided without seeking specific advice. Please note that some provisions may be amended in the Finance Act 2005.
Authorised and regulated by the Financial Services Authority.
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