Hogan Lovells

Key Dates

Response to consultation and final regulations issued on 29 January 2018.

The Pension Protection Fund (Compensation) (Amendment) Regulations 2018/95 in force on 24 February 2018.


Summary

The DWP has issued final regulations to amend entitlement to compensation from the Pension Protection Fund (PPF) for members who, at the time their scheme enters an assessment period, are receiving a bridging pension or have an accrued right to a bridging pension. The regulations provide for a member's PPF compensation to decrease at a future date to reflect the decrease which would occur if the scheme did not enter the PPF.

In consultation in August 2017, in which the government indicated that its preference was to smooth entitlement to PPF compensation over the lifetime of a member with rights to a bridging pension. However, a significant proportion of respondents to the consultation preferred the alternative approach of seeking to mirror the bridging pension provisions under the particular scheme's rules.  Draft regulations to implement the approach of mirroring scheme benefits were issued for consultation in November 2017.

The final regulations provide for:

The regulations come into force on 24 February 218 and to apply where a scheme enters an assessment period on or after this date.

Guaranteed minimum pensions (GMPs)

The DWP states in the consultation response that it will consider "step up" pensions (pensions which, if the scheme remained out of the PPF, would increase at the member's GMP pension age) at a later stage.



Date Accessed: 28/05/2022