Pension protection fund (PPF) meaning

This Checklist This Checklist provides points to weigh up when preparing and seeking sign-off for a company voluntary arrangement (CVA) involving the Pension Protection Fund (PPF). It draws on PPF Guidance Note 5 issued in 2018 (see PPF Guidance Note 5: CVAs). When an employing company (or all participating employers in a last man standing scheme) files a CVA proposal with the court, a PPF assessment period begins. Under section 137 of the Pensions Act 2004, the PPF assumes the pension trustees’ voting entitlement (see Practice Note: The Pension Protection Fund—eligibility and entry). In practice, the PPF will typically cast a vote for or against the proposal rather than refrain. The PPF is consistently focused on avoiding any precedent that might allow pension schemes to be diluted where potential PPF entry could arise in the near future (the PPF observes that this has occurred in numerous prior CVAs). The PPF also anticipates that pension trustees will appoint their financial advisers to produce a report addressing the areas of concern...

This Checklist This Checklist considers the details a company voluntary arrangement (CVA) proposal must include under the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 and Statement of Insolvency Practice (SIP) 3.2, together with expectations from other stakeholders likely to be impacted by the CVA, notably the Pension Protection Fund (PPF) and the British Property Federation (BPF): the IR 2016, SI 2016/1024, rr 2.2, 2.3 Statement of Insolvency Practice (SIP) 3.2 PPF requirements, see: Checklist for approval of CVAs involving the Pension Protection Fund BPF requirement, see: Checklist: British Property Federation engagement and red flags for company voluntary arrangements A CVA proposal sets out the detailed terms of a compromise between the company and its creditors, so it must be thorough and correct in every respect. If the proposal or surrounding circumstances are intricate, a solicitor should review or draft it to make sure it faithfully embodies the arrangement’s intentions. The proposal should be clear and...

On 2 August 2024, the PPF announced that Kodak Alaris had been reorganised under its ownership and was now ‘performing well’. The consideration for the transaction was not revealed. The PPF added, ‘this is standard practice for pension scheme assets we take on, and, after a thorough process, we are pleased to have secured a good outcome for all parties’...

What was the background to the PPF's consultation on the 2025/26 levy rules? The Pension Protection Fund (PPF) is financed through a levy charged to all defined benefit pension schemes. What each scheme pays depends partly on its size and partly on the likelihood of it entering the PPF, assessed by both the scheme’s funding position and the sponsoring employer’s insolvency risk. Every year, before the levy is applied, the PPF runs a consultation setting out proposals on the total levy it expects to collect and the approach for allocating charges to individual schemes. Although the core methodology typically remains broadly consistent year on year, the consultation details adjustments to key assumptions and identifies specific elements of the methodology that are being revised. What was the outcome? The consultation was conducted from 12 September to 23 October 2024, and the outcome was issued, a little later than first anticipated, on 30 January 2025...

In this issue: Spring Budget 2024 The Pensions Regulator Pensions taxation The Pension Protection Fund Investment Scheme governance Daily and weekly news alerts Dates for your diary Trackers Spring Budget 2024 Key pensions announcements and views from the market In the Spring Budget 2024, delivered on 6 March 2024, the Chancellor of the Exchequer, the Rt Hon Jeremy Hunt MP, outlined the government’s central objective: to stimulate growth by funnelling more capital into UK equity markets, improving the UK’s standing as a listing venue, and building on the Mansion House reforms announced in the Autumn Statement 2023. Key pensions measures include: expanding the regulatory remit of the Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) to enable the closure or winding-up of poorly performing defined contribution (DC) schemes, aligned with the reformed Value for Money (VFM) framework requiring DC funds to publish, by 2027, a public breakdown of...

The Pensions Regulator (the Regulator) The Regulator is an arm’s-length public body set up under the Pensions Act 2004 (PeA 2004). Its authority to impose contribution notices and financial support directions appears in PeA 2004, ss 38–50. Although the Act does not use the label, these provisions are widely known as the Regulator’s ‘moral hazard’ powers. Their purpose is to counter the ‘moral hazard’ arising from the Pension Protection Fund (PPF): the possibility that corporate groups might organise their structures so as to heighten exposure within their pension schemes, comfortable that the PPF would intervene if the employer entered insolvency. The principal moral hazard tools—and the only ones exercised so far—are the power to issue a contribution notice (CN) and the power to issue a financial support direction (FSD). A CN compels the recipient to pay a specified amount into a defined benefit occupational pension scheme. A CN can be issued where the criteria in PeA 2004, s 38 are satisfied. These mechanisms exist to deter behaviour that would...

What is an assessment period? When a qualifying insolvency event affects the sponsoring employer of an eligible scheme, the scheme moves into a Pension Protection Fund (PPF) assessment period as a result of that event. This arises on the occurrence of that event. The day on which that period starts is known as the ‘assessment date’ for the scheme. Since 3 January 2012, the assessment period is no longer required to last for at least 12 months. Throughout the assessment period, the PPF considers whether the scheme satisfies the requirements for entry into the PPF. In particular, the PPF will appoint an actuary to carry out a valuation of the scheme as at the assessment date, in order to determine whether the scheme’s assets are less than the protected liabilities—broadly, the benefits the PPF would pay to members if the scheme were to enter the PPF...

This page gathers pensions resources that cover key topics concerning EU law matters specifically. For general EU law information, consult EU structure, EU legislative process, EU judicial system, and EU rights and policies; these are found in the EU Law topic within the Public Law practice area for reference as well. Brexit Brexit and IP completion day—the implications for pensions [Archived] Business sales / TUPE transfers TUPE—an overview for pensions lawyers TUPE and Beckmann—the pensions exception How to deal with Beckmann liabilities on a...