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Pension Protection Fund

Volume 454: debated on Monday 11 December 2006

To ask the Secretary of State for Work and Pensions if he will amend the rules governing the Capping Regulations of the Pension Protection Fund to bring within the remit of the fund those people who took early retirement before April 2005; and if he will make a statement. (104489)

We have carefully considered the issues that have been raised by and on behalf of a number of early retirees, including whether to change the legislation which sets a cap on the compensation payable. We have taken particular account of the need for PPF compensation to balance fairness to scheme members, and remain affordable for pension schemes paying the PPF levy. We have concluded that changing the PPF compensation rules would advantage one group of scheme members compared to other groups, and could increase the cost of the PPF. We do not, therefore, propose to change PPF legislation at this time.

If a pension scheme enters the PPF, early retirees who took early retirement before April 2005 will be eligible for a 90 per cent. level of compensation, which is capped, as will the majority of people below their scheme’s normal pension age.