UK – The new Pension Protection Fund has called for a “constructive and proactive” relationship with trustees of failed pension schemes.
The PPF wants trustees to be proactive when schemes are being assessed for eligibility so they come through the process in a “timely and cost-effective manner”.
It said: “A constructive and proactive relationship between the Pension Protection Fund and the trustees will be a major factor in progressing the pension scheme through the assessment period in timely and cost effective manner.”
And trustees should manage scheme assets “with prudence”. The PPF has the power to direct the trustees if it feels the investment strategy is inappropriate.
The comments come in a new 72-page ‘Guidance for Trustees’ note from the PPF.
It said: “The guidance will help trustees and other professionals understand their roles and responsibilities associated with managing an eligible pension scheme through the Pension Protection Fund's assessment process.”
Trustees will be able to apply for a loan from the new Pension Protection Fund to make payments, the guide states.
“There may be rare occasions when pensions cannot be made at the appropriate level during the assessment period, for example where the pension scheme has insufficient cash or other assets to make the payments,” the PPF added.
“In such circumstances, provided trustees can show that the pension scheme has insufficient funds to make these payments, they can apply for a loan through their assessment team member contact.”
A PPF spokesman said the loan would be at base rates and that the PPF would not be making any money out of the move.