The Pension Protection Fund (PPF) has today (Wednesday) published a consultation on its proposal to call for out of cycle valuations following the Pensions Act 2011 (Transitional and Consequential Provisions) Regulations 2014.
Under the regulations, certain benefits that were formerly treated as money purchase will cease to be treated as such and thus will fall under PPF protection for the first time.
The regulations provide the Board of the PPF with a discretionary power to call for valuations that take account of such benefits. In its consultation the PPF sets out its proposal to call for valuations in cases where the impact of the regulations has a material effect on schemes’ funding positions.
The consultation is available on the PPF’s website.
The Board would like to receive responses to this consultation by 9 July 2014.
Please submit any responses via e-mail to:
Notes to Editors
1. The definition of ‘money purchase’ was amended by the Pensions Act 2011 and will come into force later this year. At the same time the Pensions Act 2011 (Transitional and Consequential Provisions) Regulations 2014 will come into force. The regulations were laid before parliament on 6 May 2014 following a consultation by the DWP:
2. Schemes that become eligible for PPF protection for the first time are required to submit their first valuation by 31 March 2015 and will pay the PPF levy for the levy year commencing 1 April 2015. For schemes that are already covered by the PPF the regulations confer a power upon the PPF to call for ‘out of cycle’ valuations to reflect the new benefits.
3. A copy of the ‘Consultation on the PPF’s policy on out of cycle valuations’ can be found at: http://www.pensionprotectionfund.org.uk/DocumentLibrary/Documents/Bridge_consultation_on%20_out-of-cycle_s179_valuations.pdf
4. The Pension Protection Fund was set up under the provisions of the Pensions Act 2004 in April 2005 and is classified as a public financial corporation. It has been established to pay compensation to members of eligible defined benefit and hybrid pension schemes when there has been a qualifying insolvency event in relation to the employer, and where there are insufficient assets in the pension scheme to cover Pension Protection Fund levels of compensation.
For further press information contact: Richard Williams on 020 8633 5925/0789 425 5565