Pension Protection Fund Presentation title to go here
An overview of the Pension Protection Fund & its panels Betty Bangura – Scheme Delivery Associate Paul Turrell – Panel Manager
Introduction • The PPF was set up in April 2005.
• Pays compensation to members of eligible defined benefit and hybrid schemes which are underfunded and whose employers have experienced a qualifying insolvency event on or after 6 April 2005. • Public Corporation run by a Board of Directors - derives its powers from, and set up by, the Pensions Act 2004. • Sponsored by the Department for Work and Pensions.
• Accountable to Parliament through the Secretary of State for Work and Pensions. • Also manage the Financial Assistance Scheme and the Fraud Compensation Fund.
How does the PPF work?
• Assessment – how do schemes come to the Pension Protection Fund?
• Compensation – how much do we pay?
• Funding – how is the PPF financed?
Overview of the PPF Assessment Process
Rescue
Insolvency
Enter Assessment
Validation
Compensation
Rejection
Assessment
Buyout
Transition
Compensation
Compensation
• Compensation (not pension) is paid to members; not dependent on the assets that were in the scheme. • Set by the Pensions Act 2004. • Two levels of compensation: • 100% level –
Those over NRA or in receipt of ill-health, widow(er)’s or dependant’s benefits.
• 90% level (subject to a cap) –
All remaining scheme members including those retired but below NRA.
• Indexation may differ from that provided by scheme
How is the PPF funded?
• Raising an annual pension protection levy on all eligible defined benefit and hybrid schemes • Taking in the remaining assets of pension schemes for which it assumes responsibility (including recoveries) • Returns on investments
The PPF Stats as at 31/01/ 2014 •
Millions of members, in around 6,150 DB pension schemes, protected.
•
More than 650 cases completed assessment and over 194,000 members transferred to the PPF.
•
Almost 230 cases with over 130,000 members in the assessment period.
•
More than 96,000 receiving compensation from the PPF.
•
Average compensation payment = £3,430 pa.
PPF Member Day 2010
PPF’s External Relationships
• • • • • • • • • •
The Pensions Regulator The Pensions Advisory Service The PPF Ombudsman DWP Members of Parliament Scheme Members Scheme Trustees Scheme Administrators Accounting and Auditing Firms Legal Advisers
PPF Panel Firms Paul Turrell – Panel Manager
Overview of PPF objectives for 2013/14 and beyond
Strategic Scheme Delivery views •
200 cases in PPF assessment by end of 14/15, and no FAS schemes left
•
From April 2011, 100% of new cases complete assessment in under two years (working towards 100%)
•
Working with core group of specialists (trustees, administrators, advisors) to control time, quality and cost.
Where have we been and why panels?
•
Efficiencies in scheme delivery required
•
Lack of exposure to specialist PPF work by incumbent advisers
•
Merger of Scheme Delivery Associate (SDA) with the Transition Analyst
•
Introduction of the Scheme Delivery Consultant (SDC)
What Panels in place?
Actuarial Valuation Panel (AVP) – Launched July 2011 Specialist Administration Services Panel (SASP) – Launched August 2012 Trustee Advisory Panel (TAP) – Launched September 2013 Audit Services Panel (ASP) – Launched December 2013
Assessment Period Legal Panel (LAP) – Expected to launch April 2014
What Panels in place?
What has happened so far and what success have we had? Panels so far…
•
Collaboration across panels
•
Tools – – – – –
Roles and responsibilities PPF Extranet Cost matrix External expenses template Standard documents
•
Reduced costs and improved quality
•
Few cases require escalation and managerial involvement
•
97% of cases validated since panel launch sit with the SASP either as incumbent or as new allocations
Panel Successes for 2012/13 & Vision for the future
What does future success look like? •
Understand detailed costs
•
Improve efficiencies
•
Work closely on innovations aligned with our panels
•
Set a stable pipeline
What other developments are happening at the PPF?
•
Member Services – PPF administration in house from Summer 2014
•
Data Quality – Aligning to tPR, Datahub and better working practices
•
PPF Operational Legal Panel
Over To You!
QUESTIONS?
Introduction • The PPF was set up in April 2005.
• Pays compensation to members of eligible defined benefit and hybrid schemes which are underfunded and whose employers have experienced a qualifying insolvency event on or after 6 April 2005. • Public Corporation run by a Board of Directors - derives its powers from, and set up by, the Pensions Act 2004. • Sponsored by the Department for Work and Pensions.
• Accountable to Parliament through the Secretary of State for Work and Pensions. • Also manage the Financial Assistance Scheme and the Fraud Compensation Fund.
How does the PPF work?
• Assessment – how do schemes come to the Pension Protection Fund?
• Compensation – how much do we pay?
• Funding – how is the PPF financed?
Overview of the PPF Assessment Process
Rescue
Insolvency
Enter Assessment
Validation
Compensation
Rejection
Assessment
Buyout
Transition
Compensation
Compensation
• Compensation (not pension) is paid to members; not dependent on the assets that were in the scheme. • Set by the Pensions Act 2004. • Two levels of compensation: • 100% level –
Those over NRA or in receipt of ill-health, widow(er)’s or dependant’s benefits.
• 90% level (subject to a cap) –
All remaining scheme members including those retired but below NRA.
• Indexation may differ from that provided by scheme
How is the PPF funded?
• Raising an annual pension protection levy on all eligible defined benefit and hybrid schemes • Taking in the remaining assets of pension schemes for which it assumes responsibility (including recoveries) • Returns on investments
The PPF Stats as at 31/01/ 2014 •
Millions of members, in around 6,150 DB pension schemes, protected.
•
More than 650 cases completed assessment and over 194,000 members transferred to the PPF.
•
Almost 230 cases with over 130,000 members in the assessment period.
•
More than 96,000 receiving compensation from the PPF.
•
Average compensation payment = £3,430 pa.
PPF Member Day 2010
PPF’s External Relationships
• • • • • • • • • •
The Pensions Regulator The Pensions Advisory Service The PPF Ombudsman DWP Members of Parliament Scheme Members Scheme Trustees Scheme Administrators Accounting and Auditing Firms Legal Advisers
PPF Panel Firms Paul Turrell – Panel Manager
Overview of PPF objectives for 2013/14 and beyond
Strategic Scheme Delivery views •
200 cases in PPF assessment by end of 14/15, and no FAS schemes left
•
From April 2011, 100% of new cases complete assessment in under two years (working towards 100%)
•
Working with core group of specialists (trustees, administrators, advisors) to control time, quality and cost.
Where have we been and why panels?
•
Efficiencies in scheme delivery required
•
Lack of exposure to specialist PPF work by incumbent advisers
•
Merger of Scheme Delivery Associate (SDA) with the Transition Analyst
•
Introduction of the Scheme Delivery Consultant (SDC)
What Panels in place?
Actuarial Valuation Panel (AVP) – Launched July 2011 Specialist Administration Services Panel (SASP) – Launched August 2012 Trustee Advisory Panel (TAP) – Launched September 2013 Audit Services Panel (ASP) – Launched December 2013
Assessment Period Legal Panel (LAP) – Expected to launch April 2014
What Panels in place?
What has happened so far and what success have we had? Panels so far…
•
Collaboration across panels
•
Tools – – – – –
Roles and responsibilities PPF Extranet Cost matrix External expenses template Standard documents
•
Reduced costs and improved quality
•
Few cases require escalation and managerial involvement
•
97% of cases validated since panel launch sit with the SASP either as incumbent or as new allocations
Panel Successes for 2012/13 & Vision for the future
What does future success look like? •
Understand detailed costs
•
Improve efficiencies
•
Work closely on innovations aligned with our panels
•
Set a stable pipeline
What other developments are happening at the PPF?
•
Member Services – PPF administration in house from Summer 2014
•
Data Quality – Aligning to tPR, Datahub and better working practices
•
PPF Operational Legal Panel
Over To You!
QUESTIONS?
