The Fraud Compensation Fund (FCF) was established under the Pensions Act 2004 to provide compensation to occupational pension schemes, with insolvent employers, that suffer a loss that can be attributable to an offence involving dishonesty. The Fraud Compensation Fund became operational on 1 September 2005 and replaces the former Pensions Compensation Board. It applies to most defined benefit and defined contribution occupational pension schemes. It does not apply to state retirement pensions.
These web pages provide general information about the Fraud Compensation Fund. They are not an authoritative statement of law. Full details on the basis on which fraud compensation can be paid are set out in the Pensions Act 2004 and regulations made under it the Occupational Pension Schemes (Fraud Compensation Payments and Miscellaneous Amendments) Regulations 2005, and the predecessor provisions in the Pensions Act 1995 and the Occupational Pension Schemes (Pensions Compensation Provisions) Regulations 1997.
The FCF is a statutory fund run by the Board of the Pension Protection Fund (the Board), a statutory corporation established under the Pensions Act 2004.
The FCF is funded from the Fraud Compensation Levy raised on eligible pension schemes. The assets held in the Fund are managed by the Board in accordance with a Statement of Investment Principles.
Applications to the Fraud Compensation Fund should be made on the Fraud Compensation Fund Application Form. For more information on the process, please refer to the FAQs to the right and all other FAQs on the Fraud Compensation Fund.
Fraud Compensation Levy
The Board has decided, for 2011/12, to raise a Fraud Compensation Levy. The levy is charged against all UK defined benefit and defined contribution pension schemes, at the rate of 25p per scheme member.
The amount of levy payable is calculated by reference to the total number of members of the scheme on the last day of the scheme year before the beginning of the previous financial year. So for the levy year 1 April 2011 to 31 March 2012, the reference point for many schemes is likely to be 31 March 2010.
Invoices are being billed by the Pensions Regulator on the Board's behalf and includes details of how to query the invoice if you believe an error has been made.