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  • Actuarial Reduction

    This reduction, determined by the Board, is applied to your compensation if you start receiving payments from us before your Normal Pension Age (NPA).

  • Accrual rate

    The rate at which pension benefits build up for members in defined benefit (DB) schemes. As a member of a DB scheme, you’ll get a certain amount for each year of pensionable service.

  • Active member

    A member of a pension scheme who’s in active pensionable service.

  • Assessment period

    During this time, the PPF investigates whether it can assume responsibility for a scheme. The assessment period starts at the assessment date which can be found on your statement of compensation entitlement.

  • Assets

    Everything that the trustees hold for the pension scheme. This can include investments, bank balances and any amounts owed to the scheme.

  • Admissible rules

    Rules of the former pension scheme after the application of a statutory test.

  • Attachment order

    An order made by the court as part of a financial settlement on divorce. It earmarks part of the member’s pension, which means part of their compensation will become payable to their ex-spouse or civil partner when the member retires.

  • Beneficiary member

    Also known as a survivor compensation member. The spouse, civil partner or relevant partner of a member who’s receiving compensation following the member’s death.

  • Benefit modeller

    This is a functionality on the member website that allows certain registered members to get an estimate of their compensation at different ages with different lump sum percentages.

  • Benefit statement

    The online benefit statement is available to registered members. It’s an estimate of your compensation at your Normal Pension Age, ignoring future inflation. It’s based on the information we hold about you.

  • Board of the Pension Protection Fund

    A statutory body established under the provisions of the Pensions Act 2004. The PPF became operational on 6 April 2005.

  • Caseworker

    The PPF employee assigned to work with the trustees of schemes as they progress through the assessment period.

  • Cash Equivalent Value (CEV)

    The value of your benefits from the PPF as a cash sum, which will only be provided for divorce proceedings.

  • Child compensation member

    The child of a deceased member who’s receiving compensation following the member’s death.

  • Civil partner

    An individual in a civil partnership with the member under the Civil Partnership Act 2004.

  • Civil partnership

    A relationship between two individuals registered under the Civil Partnership Act 2004.

  • Claim form

    A form to be completed after a member’s death to provide information to the PPF about any spouse, civil partner, relevant partner or eligible children who may be entitled to receive compensation following the member’s death.

  • Compensation

    If the PPF has assumed responsibility for a scheme, it will make compensation payments to the scheme’s members. These payments replace the scheme pension benefits in accordance with the Pensions Act 2004.

  • Compensation cap

    There is a statutory limit on annual compensation that anyone under Normal Pension Age (NPA) at assessment date will be tested against.

  • Compensation commencement lump sum

    A tax-free lump sum derived by commutation of the compensation.

  • Compensation credit member

    As a result of a Compensation Sharing Order you’ll become entitled to a share of your ex-spouse or former civil partner’s compensation. When the Order is implemented you too will become a member of the PPF.

  • Compensation payment

    Payments of compensation made by the Board.

  • Consumer Prices Index (CPI)

    The general index of consumer prices published by the Office of National Statistics. The increases to PPF compensation in deferment and payment for certain periods of service are linked to CPI. Please see our FAQs for further details.

  • Deferred compensation

    As long as you aren’t already receiving part of your entitlement, you can put off receiving payments up until the age of 75.

  • Defined Benefit (DB) scheme

    DB – or final salary – schemes are schemes where the final benefit is known to the member and is usually calculated through a formula using incorporating wages and length of service. Only DB schemes are eligible for coverage by the PPF.

  • Defined Contribution (DC) scheme

    Also known as a money purchase scheme. In these schemes, the member won’t know the final benefit. Benefit levels can depend on the success of investment returns and annuity rates.

  • Deferred member

    A member who isn’t receiving compensation yet.

  • Early retirement

    This means you’re taking your compensation at an earlier date than your Normal Pension Age. Your payments will be decreased to take into account the fact that they’re being paid earlier.

  • Eligible child

    The natural child (born or being carried by the mother at date of death) of the member, an adopted child, or a child who was dependent on the member at date of their death and who’s:
    • • Under 18, or
    • • Over 18 and under 23* and in qualifying education, or
    • • Over 18 and under 23* and has a qualifying disability.
    • (*) Or under age 25, where the child was under the age of 25 on 5 April 2006 and was entitled to receive compensation prior to 6 April 2006.

  • Employer

    The company which employed the member whilst they were in pensionable service for the former pension scheme.

  • Ex-spouse

    An individual who was previously married to the member.

  • Former civil partner

    An individual who was previously in a civil partnership with the member.

  • Former pension scheme

    The member’s pension scheme for which the PPF assumed responsibility.

  • Independent trustee

    A trustee who has no connection to the scheme, the employer or members. Independent trustees may well be appointed to a scheme when the employer is bankrupt.

  • Indexation

    The way in which payments may be adjusted with reference to changes in the Consumer Prices Index (CPI).

  • Insolvency event

    A qualifying insolvency event must happen to a company before its scheme can be considered for the PPF.

  • Late retirement

    This is when you decide to start receiving your compensation payments later than your Normal Pension Age. Your payments will then be increased to take into account the fact that they’re being paid later.

  • Liabilities

    Amounts that a pension scheme will have to pay now and in the future. The most common liability is paying pensions.

  • Nomination form

    A form for the member to complete to provide information to the PPF in respect of a relevant partner.

  • Normal Pension Age (NPA)

    The age under the admissible rules of the former pension scheme at which the member was entitled to payment of their pension without actuarial adjustment, disregarding any special provision for early payment.

  • One Time Code (OTC)

    This is a six digit code that is sent to either your mobile phone or landline as an additional security measure during the registration, login and forgotten password processes. The code can only be used once and you’ll receive a different one every time.

  • Payment confirmation certificate

    This is the document sent to pensioner members with the Welcome pack letters.

  • Pensioner

    A scheme member who’s currently receiving a pension from the scheme.

  • Pensioner member

    A member who’s receiving compensation from the PPF and isn’t a vested member.

  • Protected pension age

    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.

  • Qualifying disability

    A child aged 18 or over can still be eligible to receive compensation (up to the age of 23) if they cannot undertake full time paid employment due to a disability which is covered by the Equality Act 2010.

  • Qualifying education

    A child aged 18 or over can still be eligible to receive compensation (up to the age of 23) if they’re in full time education. They will need to confirm their eligibility each year until they no longer qualify.

  • Relevant partner

    Someone of either sex who you aren’t married to, nor in a civil partnership with, but whom you live with as if you were.

  • Retirement illustration

    When you’re nearing your date of retirement, you might want to know how much compensation you’ll receive from us. We’ll help you figure that out with an illustration.

  • Retirement forecast

    If you’re not about to retire just yet, but do want to get an estimate of what your future compensation might look like, you can request a forecast.

  • Revaluation

    Increases in deferred compensation.

  • Separate scheme lump sum

    Defined non-commutable lump sum provided by the admissible rules in addition to compensation.

  • Spouse

    A person married to the member.

  • Statement of compensation entitlement

    A statement that details your entitlement to compensation from the PPF.

  • Statement of early compensation entitlement

    Statement that details the level of compensation which would be payable if you chose to retire before your Normal Pension Age.

  • Survivor’s compensation

    The compensation that’s being paid to a spouse, civil partner or relevant partner following the member’s death.

  • Survivor compensation member

    Also known as a beneficiary member. The spouse, civil partner or relevant partner of a member who’s receiving compensation following the member’s death.

  • Section 120 notice

    The form that insolvency practitioners use when informing the PPF that a company with a pension scheme has suffered an insolvency event.

  • Section 143 valuation

    The valuation of a scheme carried out by an actuary at the end of an assessment period, which will determine whether or not the scheme can pay its members above PPF levels of compensation.

  • Terminal ill health payment

    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. You’ll need to fill in the Terminal Ill Health Retirement Illustration form which will need to be signed by your doctor or medical practitioner.

  • Trustee

    A person responsible for administering the assets and liabilities of a pension scheme.

  • Vested compensation member

    A vested – or mixed compensation – member is already receiving part of their compensation, another part of their entitlement is still due to commence.

  • Welcome pack

    A personal information pack detailing the compensation you’ll receive from the PPF when we’ve assumed responsibility for your former pension scheme.

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