If you are already receiving compensation from the Pension Protection Fund and want information on your entitlements, this and relevant FAQs can be found on our members' site.

Broadly speaking the Pension Protection Fund will provide two levels of compensation which are outlined below.

1. For individuals that have reached their scheme’s normal pension age or, irrespective of age, are either already in receipt of survivors’ pension or a pension on the grounds of ill health, the Pension Protection Fund will generally pay 100% level of compensation.

In broad terms and in normal circumstances, this means a starting level of compensation that equates to 100% of the pension in payment immediately before the assessment date (subject to a review of the rules of the scheme by the Pension Protection Fund).

The part of this compensation that is derived from pensionable service on or after 6 April 1997 will be increased each year in line with the Retail Prices Index capped at 2.5%.  This could, potentially, result in a lower rate of increase than the scheme would have provided.

2. For the majority of people below their scheme’s normal pension age the Pension Protection Fund will generally pay 90% level of compensation.

In broad terms and in normal circumstances, this means 90% of the pension an individual had accrued (including revaluation) immediately before the assessment date (subject to a review of the rules of the scheme by the Pension Protection Fund) and revaluation in line with the increase in the Retail Prices Index between the assessment date and the commencement of compensation payments, this revaluation being subject to a cap of 5% in respect of service from April 1997 to April 2009, and 2.5% in respect of service thereafter. These caps apply in deferment.

This compensation is subject to an overall annual cap, which, as at April 2009, equates to £28,742.69 at age 65 after the 90% has been applied. (the cap will be adjusted according to the age at which compensation comes into payment. Please refer to the current compensation cap factors).

Once compensation is in payment, the part that derives from pensionable service on or after 6 April 1997 will be increased each year in line with the Retail Prices Index, capped at 2.5%.  Again, this could result in a lower rate of increase than the scheme would have provided.

In addition there will also be compensation for certain survivors.

The Pension Protection Fund has the ability to alter the levy to meet its liabilities. However, in extreme circumstances compensation could be reduced.

• Revaluation and indexation could be reduced by the Pension Protection Fund if circumstances required it.
• Levels of compensation could be reduced by the Secretary of State on the recommendation of the Pension Protection Fund.