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Yes. As long as you are not already receiving part of your entitlement, you can put off receiving payments up until the age of 75. You will need to let us know what date you would like your compensation payments to start.



Yes, you can change your mind about deferring your compensation and ask to take your payments earlier, or later, than planned.

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 which can be found 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 your employer became insolvent. 

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 have been capped, this will be shown on your ‘Illustration and Retirement Options’ form.

We’ll contact you closer to when you are due to retire to let know what your options are for receiving payments.

 

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.

 

If you hadn’t already retired when your pension scheme transferred to the PPF,  this will be shown on the Illustration and Retirement Options form that we will send you shortly before your normal retirement date. 

If you had already retired when your scheme transferred, your scheme would have told you if you were affected by the compensation cap during the PPF assessment period.


We will pay your compensation directly into your bank account.

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 2018, the cap at age 65 is £39,006.18 (this equates to £35,105.56 per year when the 90 per cent level is applied).

Up to and including 31 March 2018, the cap at age 65 is £38,505.61 per year (this equates to £34,655.05 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.

You can view a full list of the compensation caps for 2017/18 at each age here.

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. We’ll also send you a payslip if your payment increases by more than £1 per month. All your payslips will be available to view online.

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 2017 the CPI rose by 2.9 per cent, and we have therefore used the required maximum figure of 2.5% in our calculations on 1 January 2018.

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, you will receive a reduced amount if you take your compensation early. This is because, by choosing to take your compensation early, we will need to pay your compensation over a longer period of time.

We will get in touch with you at least six months before your normal pension age (NPA), or selected pension age if you opted to defer, about your options for receiving compensation payments.

Or if you want to receive your compensation early, you should contact us to ask for an early retirement quote. We will  confirm if you are eligible to receive early payments and you can then decide whether to apply or not. Generally speaking, you must be at least 55 years of age in order to take early retirement.



Yes, if you’re a deferred member of a scheme that provided revaluation (which will be the case for most of our members).

The PPF can pay compensation at different ages to members with multiple Normal Pension Ages (NPAs). You might have different NPAs for different periods of service. Each period of service with a different NPA is referred to as a “tranche” and may be put into payment at the same time or separately.

Please see our 'when you retire' booklet for further details multiple NPAs.

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

A relevant partner is entitled to compensation as your dependant only if there was a provision in your former pension scheme rules to provide for a relevant partner.

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

Approximately three months before your retirement date, you will receive an Illustration and Retirement Options form which sets out the range of options available to you. You can choose which option best suits you by returning the form to us.

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

Lump sums entitlements will be processed via BACs on the day of your retirement, and it could take up to 5 working days from then for the money to be received into your bank account.

Your payments will be treated as earned income and taxed accordingly. We will send you a P60 at the end of each tax year to show you the total amount of payments you have received and the amount of tax deducted. Please keep your P60 safe so you can refer to it if you need to complete an income tax return.

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.

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

You might want to start receiving your payments later than your normal pension age.

You can ask us to defer payment of your Compensation at any time by writing to us at:

Pension Protection Fund
PO Box 254
WYMONDHAM
NR18 8DN

Please include the following with your request:

  • Your name, address, date of birth and National Insurance Number
  • The name of your former pension scheme
  • The date on which you would like your compensation payments to start

The option to defer will also be included in your Illustration and Retirement options form that we automatically send you approximately six months before you reach your normal retirement age.

Your payments will then be increased to take into account the fact that they are being paid later.

You will not be able to delay payments if you are already receiving part of your entitlement.

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.

We will only send you a paper payslip in the event that your upcoming monthly payment changes by more than £1 from the previous month.

However, if you register on our member website you'll be able to view all your payslips online. Your payslip will look like the example below.

 

 

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