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FAQs

The Trustee has created a section on the new member website for questions and answers.  To view these, please see here.

We have here collected some additional questions and answers that members in PPF Assessment often ask us, which you may also find helpful. 


Pension Payments

For existing pensioners who stay with the current scheme and start moving in to the PPF, the PPF will commence payment of pensions with effect from 29 March 2018, there will be no break in payments and members will still continue to get a monthly pension.

There will be a slight difference however in when future pensions are paid. The new British Steel Pension Scheme will mirror the old scheme and, for the vast majority of pensioners, continue to pay their pension on the last working day of the month for the calendar month in advance. 
The PPF also pays a calendar month in advance but pays on the 1st of the month. Members will therefore see a slight change if selecting the PPF option. This change is likely to take place with effect from the 1st May 2018 payment. Some pensioners may be paid on a different day currently, they will also be aligned to the 1st of the month under the PPF.

The PPF also pays annual increases at a different time. The PPF pays these increases on the 1st January each year. The new British Steel Pension Scheme will continue, like the old scheme did, to pay increases at the start of April. As such, the first increase date in PPF assessment will be 1st January 2019. For those that are eligible for this increase, and have been a pensioner since 29th March 2018, the increase amount will be pro-rated for the 9 months that the scheme will have been in assessment.



Retirement

You have to be 55 years old or over to retire early - unless you have the right to take your pension earlier under the rules of your former pension scheme (known as protected pension age).

If you want to receive your compensation early, you should contact us to ask for an early retirement quote. We will then confirm if you are eligible to receive early payments and you can then decide whether to apply or not.

Further information is available in the 'When you retire' booklet. To view this, please see here.

If you were below your Normal Pension Age when your former scheme entered the PPF assessment period then, when you retire, you will receive compensation based on 90 per cent of what your pension was worth at the time the assessment period started.  

Parts of your compensation may be payable at different ages, depending on your entitlement under your former scheme. 

The total amount of compensation you can receive from us each year is capped at a certain level (known as the compensation cap), although the vast majority of members are not affected by this cap. 

If your payments will be capped, you will be made aware when you receive your retirement options.

Your compensation will increase each year until you reach your Normal Pension Age (or Early Retirement Date if you retire early), and the increase will be in line with inflation, up to a limit set by government. But if inflation falls below zero, your compensation will not change. 

If you decide to put off taking your compensation beyond your normal pension age, then your compensation will be increased using actuarial factors. 

There are limits to the increases you’re entitled to as a deferred member. For compensation that’s derived from pensionable service before 6 April 2009, the amount of revaluation is capped at 5 per cent per year compound. The amount of revaluation for compensation related to service on and after that date won’t exceed 2.5 per cent per year compound. 

This only applies to members that haven’t reached their scheme’s normal pension age when the employer becomes insolvent. The total amount of compensation you can receive each year is capped at a certain level, although the vast majority of members are not affected by this cap.

From 1 April 2017, the cap at age 65 is £38,506 per year (this equates to £34,655 per year when the 90 per cent level is applied).

The earlier you retired, the lower the annual cap is set, to compensate for the longer time you will be receiving payments. The latest set of compensation cap factors can be found in the ‘How the PPF works’ section of the website.

If you have built up additional pensionable service in the Scheme as a result of transferring in benefits from another pension arrangement or received a “1 for 7” added years’ service credit or used AVCs to buy additional years’ service in the Scheme, that service will qualify for the purposes of PPF compensation.  If you have 21 years’ service or more (including transferred in service / “1 for 7” added years / additional years’ service purchased by means of AVCs), please see the question below about how this may affect your benefits.

Please note that other Defined Contribution (DC) /Money Purchase benefits will not qualify and will need to be discharged during the assessment period.

Under PPF compensation regulations, members who are not in receipt of their pension and are under Normal Retirement Age (usually age 65 on this Scheme) at the PPF assessment date (29 March 2018) will be subject to a cap on their benefits, known as the Compensation Cap.

From 6 April 2017, the Long Service Cap came into effect for any members who have 21 or more years' service in their scheme. For these members the Compensation cap is increased by three per cent for each full year of pensionable service above 20 years, up to a maximum of double the standard cap.

For information, to view the latest Compensation Cap factors please see here. Please note these factors are reviewed annually and the factors may change prior to your retirement.

How we increase your compensation, is set by law. Any part of your compensation derived from pensionable service before 6 April 1997 won’t increase in payment.

But any part of your compensation derived from pensionable service on or after 6 April 1997 may increase annually. Increases to compensation payments are applied on 1 January each year. We’ll let you know if your compensation payment will increase and the amount you’ll receive. 

The annual increase is set in line with the change in the Consumer Prices Index (CPI) up to a maximum of 2.5 per cent. In the year to May 2016 the CPI rose by 0.3 per cent, and this is the figure we were required to use on 1 January 2017. 

You’ll get a proportionate increase in your first year of retirement if you’ve been receiving compensation from us for less than 12 months.

For dependants, they will receive annual increases if the original member received increases on their compensation, and then the annual increase is based on the date the compensation came into payment. This will be a date during the member’s lifetime if they were already retired. If they passed away before retiring, this will be the date you started receiving the compensation as a dependant.

Yes, your compensation will be increased to reflect that you will be receiving your benefits at a later date.

You can defer your compensation up until the age of 75.

For monthly compensation, we'll pay you in advance and generally on the first day of the month.

Yes, in most cases you can take up to 25 per cent of the value of your compensation as a tax free lump sum when you decide to retire.

You might be able to receive your entire PPF compensation as a lump sum, known as a ‘trivial lump sum’. To do this, you’ll need to make sure that you meet the following conditions: 

  • You must be aged between 55 (or earlier if you have a "protected" pension age) and 75.
  • The value of all of your pension benefits (from other pension schemes as well as the PPF) must be less than £30,000. 
  • And, if you wish to take a trivial lump sum from other pension schemes alongside your PPF lump sum, you’ll need to take all of them within a 12 month period.
  • If you are eligible to receive your compensation as a one-off trivial commutation lump sum, 25 per cent would be payable tax free.


Bereavement

Yes, if you have eligible children, they will receive compensation until they are no longer eligible.
An eligible child is a child who is your biological child (born or unborn at the date of your death), an adopted child, or child who was financially dependent upon you at the time of your death. And who is:

  • under 18, or
  • over 18 and under 23 and in qualifying education, or
  • over 18 and under 23 and has a qualifying disability.
If you die before your former pension scheme enters PPF assessment survivor provisions may differ.

This depends on the rules of your former pension scheme - if your spouse/civil partner or relevant partner would have received compensation under those rules then they'll be eligible to receive survivor's compensation from us. We will ask the person dealing with your estate for contact details of a spouse/relevant partner where one would be eligible.

If you die after you have retired, an eligible spouse, civil partner or relevant partner will receive half the annual compensation you would be receiving at your date of death.

If you die before you retire and before you have reached the normal pension age of your former scheme, an eligible spouse, civil partner or relevant partner may receive half the compensation you would have received had you reached normal pension age immediately before you died. This means the compensation would be revalued to the day before death and no early retirement reduction would be applied.

If you die before you retire and after you have reached the normal pension age of your former scheme, an eligible spouse, civil partner or relevant partner may receive half the compensation you would have received had you retired immediately before you died.

A relevant partner is someone you are not married to but who you live with as if you are married.

The amount of compensation a member’s children will receive will depend on whether a spouse, civil partner or relevant partner will also receive compensation following the member’s death.
Where compensation is being paid to a spouse, civil partner or relevant partner, the following compensation will be paid to the member’s children:

  • one child – 25 per cent of the member’s compensation
  • two or more children – 50 per cent of the member’s compensation, divided equally.
Where compensation is not being paid to a spouse, civil partner or relevant partner, the following compensation will be paid:
  • one child – 50 per cent of the member’s compensation
  • two or more children – 100 per cent of the member’s compensation, divided equally.
Payments will be made into a bank account in the name of the relevant child. 
When a child is no longer eligible for compensation, we will stop making payments to them.
But, if there are other children who are still eligible, the amount of compensation they receive will be recalculated in line with the criteria above.

If you have nominated your partner to receive your compensation (and your former pension scheme allowed for a survivor’s pension to be paid to a relevant partner) he/she will receive the survivor’s compensation. We will need you to complete a nomination form even if you previously completed one for your former pension scheme. 

If you have not nominated your partner, your former spouse will receive the compensation if we become aware of them.

We will stop paying compensation to a child when they reach the age of 18 unless they are in qualifying education or have a qualifying disability. No compensation will be paid after the age of 23. 

If a child is 18 or over and takes any break from full time education, their compensation will stop. However if they re-enter full-time education within 12 months, their compensation payments could be resumed if they let us know. 

Up to the age of 23, children will receive compensation if they cannot undertake full-time paid employment due to a disability which is covered by the Equality Act 2010.

Once we have been told of your death we will stop further payments immediately. As we pay compensation monthly in advance, a delay in telling us may lead to an overpayment, which will have to be paid back to us from your estate.

A relevant partner is someone of either sex who you aren't married to, or in a civil partnership with, but whom you live with as if you are married or in a civil partnership.


Terminal Ill Health

Yes, provided you are eligible, you can receive a terminal ill health payment at any age before your normal pension age. 

 To be eligible for a terminal ill health payment, you must be diagnosed with a terminal illness and have six months or less to live. This diagnosis will need to be confirmed by a doctor.
You must also not have received any compensation from us previously.

Receiving a terminal illness lump sum will not affect your dependant(s) eligibility for compensation after your death.

Whether or not your spouse/civil partner/relevant partner is eligible to receive PPF compensation, following your death, will depend on the rules of your former pension scheme.

If you leave any children, they may also be eligible for compensation. 

Should you take a terminal illness lump sum, any dependant pensions will be calculated on the basis that you attained your Normal Pension Age on the date of your death, and will not be reduced for having taken the lump sum.

Please see our 'terminal ill health benefits' booklet for further details on survivors' eligibility for compensation.  To view this, please see here.