mast image

Impact Investing

IPE special report May 2018

Sections

UK lifeboat scheme to amend benefit cap for long-time workers

Related images

  • UK lifeboat scheme to amend benefit cap for long-time workers

UK – The UK's Pension Protection Fund (PPF) is to see its statutory benefits cap amended, with the government announcing plans for more generous benefits for workers with payment records over 20 years.

Detailing the revised cap – with benefits previously limited to £31,380 (€35,854) per annum if a defined benefit (DB) scheme entered the PPF – pensions minister Steve Webb stressed that the changes would not apply retroactively.

"I propose that the compensation cap will be increased by 3% for every full year of service above 20 years," he said in a written statement laid before the House of Commons. "There will still be a maximum, which will be double the standard cap."

He added: "This revised compensation cap will not be backdated. Anyone covered by this change who is already in receipt of capped compensation will get any increase from the date the relevant legislation is in place."

Under the new system, Webb noted that someone with a DB pension of £50,000 and 40 years of contributions to the eligible scheme would be entitled to £45,000, if they drew their pension after 65.

The chance follows Webb's decision to review the cap, announced during a parliamentary debate on the benefits of workers in the Visteon pension fund.

The fund entered administration in 2009, at the time with a deficit of £350m.

Union Unite filed a lawsuit in 2011 alleging that Visteon, a supply group sold by car manufacturer Ford in 2000, offered workers assurances that pension benefits would be secure after the sale.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2436

    Asset class: Real Estate - Core Open-ended Real Estate Equity Fund (non-listed).
    Asset region: Asia Pacific.
    Size: Approx. CHF 70-100m per investment.
    Closing date: 2018-05-25.

  • QN-2438

    Asset class: High Yield Bonds.
    Asset region: US.
    Size: USD 300 million.
    Closing date: 2018-05-25.

  • RE-2441

    Closing date: 2018-05-31.

Begin Your Search Here