The Fraud Compensation Fund (the ‘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 FCF became operational on 1 September 2005 and replaces the former Pensions Compensation Board. The FCF is operated by the Board of the Pension Protection Fund (the ‘Board’). It applies to most defined benefit and defined contribution occupational pension schemes. It does not apply to state retirement pensions or personal pension schemes.
The FCF is funded from the Fraud Compensation Levy raised on eligible pension schemes. The assets held in the FCF are managed by the Board of the Pension Protection Fund (the ‘Board’) in accordance with a Statement of Investment Principles.
For more information on the process, please refer to our booklet and fact sheet.
You can also view the FAQs to the right and all other FAQs on the Fraud Compensation Fund.
Applications to the FCF should be made on the Fraud Compensation Fund Application Form.
Fraud Compensation Levy
The Board is not obliged to raise a levy each year. However, the Board has taken the decision to raise a levy in 2017/18. We have been notified of a number of potential future claims. While the size and likelihood of these future claims is unclear, with prudent forward planning in mind, the levy will be set at 25p per member. It is expected that this will raise £5 million, to ensure we are prepared for these potential claims while smoothing the costs over time.
The Board will keep this matter under review for future levy years.
Further information about pension scheme levies and how they are collected can be found on The Pensions Regulator's website. Any questions about how this levy is collected should be directed to The Pensions Regulator.