Landmark payments signal new era in pension protection

A key milestone in the financial security of thousands of pensioners was reached today as the Pension Protection Fund (PPF) made its first direct payments to members of occupational pension schemes.

First direct payments from the PPF being made to pensioners on 1st December 2006
Over 90,000 pension scheme members already benefiting from PPF security
Significant step forward in protection of final salary schemes in UK

Over 90,000 pension scheme members already benefit from protection, but until today pensioners were paid by the relevant administrator or payroll provider for their scheme under the control of the trustees. Today the Pension Protection Fund has taken over responsibility for making those and future payments to scheme members of three schemes.

The first three schemes to transfer into the Pension Protection Fund and whose pensioners have received compensation payments are:

The Chilton Scotland Pension Scheme, 31 members from Chilton Scotland Ltd, specialising in the manufacturing, dyeing and finishing of weft-knit fabric based in Girvan, Ayrshire

The Padiham Retirement Benefits Plan, with nine members from Perseverance Mills Ltd, which produced specialist lightweight fabrics for the parachute, leisure and outdoor sports industries, based in Lancashire.

BDH Retirement Benefits Scheme, with six members from Hamilton Machinery Sales Ltd, specialising in the production of plastic, based in Aylesbury

Pension Protection Fund Chairman, Lawrence Churchill said: “The first compensation payments being made directly from the PPF complete the final phase in the PPF’s development. We were set up to pay compensation and now we are doing so. From here on in there will be a continuous flow of schemes completing their assessment period and their pensioners will feel reassured that their income every month comes from a known, trusted and stable source.”

Chief Executive Partha Dasgupta said: “Despite the complexities of pensions, we never forget the people we exist to protect, the members of final salary schemes right across the UK. Today’s landmark event could not have been achieved without the hard work of the trustees of the individual pension schemes concerned. Working together we have demonstrated that we can pay the right compensation to the right people at the right time, and provide real security in retirement for members of final salary pension schemes. ”

Pensions Minister, James Purnell said: “The PPF was introduced by the Government to safeguard the savings of millions of people contributing to defined benefit occupational pension schemes - and these payments show it is doing just that. The PPF will ensure that workers who save into a final salary scheme will have a safety net against financial difficulties their company may face in the future.”