- Let’s celebrate the Pension Protection Fund as Carillion becomes its 1000th pension scheme.
- PPF has been a real success story, with around a quarter of a million members having their pensions underwritten after their employer schemes failed.
- Before PPF existed, members could lose their entire life savings and their pension.
I am delighted to see the ongoing success of the Pension Protection Fund (PPF). Carillion has just become the 1000th scheme to enter the pensions lifeboat and its 4000 members can look forward to a more secure retirement.
The sterling efforts of all PPF staff have ensured it is working as Parliament designed it to do. Since being set up in 2005, the PPF has been able to restore pensions to over 250,000 people, with over 150,000 of them already receiving their pensions.
The PPF has managed its assets excellently and now has a fund worth over £32billion. It has been a force for good in the UK pensions landscape. I remember only too well the plight of the 150,000 members of pension schemes which failed before the PPF was established, either because their employer became insolvent or because the company just decided to walk away from its liabilities. Loyal long-serving workers, having lost their jobs, faced losing their entire pension, together with the rest of their life savings which were also in the scheme, and some of their state pension. The impact was devastating on them and their families and their plight highlighted the lack of protection for members of final salary-type schemes – who had all previously been assured that their pensions were safe and protected by laws introduced after the 1990s Maxwell scandal.
Having worked with unions and been supported by wonderful MPs and journalists trying to help so many of these good people from 2000 till 2004, I was delighted that we played a part in ensuring future pensions would be properly protected. This industry protection arrangement does not replace the entire pension, it was never designed to do so, but it does insure around 80-90% of the lifelong income each person would have received (subject to a cap). The PPF is funded by other pension schemes and protected by rules that are designed to prevent employers being able to just walk away from their liabilities, as they could previously do.
The PPF is a real success story. Its customer satisfaction ratings are 97%, with members being delighted at the efficient, caring service and reassurance they receive. The staff are dedicated to ensuring people are looked after at what is usually a very difficult time, with most members having lost their jobs.
Having seen first-hand the impact of members facing the possible loss of their entire pension – I am proud that the PPF has protected so many schemes so far. Not only has it looked after members so well, its investment strategy and performance have also been successful, with the fund achieving excellent returns and keeping the costs of the levy paid by sponsoring employers under control.
Congratulations are due on reaching today’s landmark and it is refreshing to be able to celebrate a pensions success. Well done PPF.