Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
Quick links:
  • Home
  • The Actuary Issues
  • June 2013
06

DWP raises cap on PPF payouts

Open-access content 26th June 2013

Pension Protection Fund payments are to take account of an individual’s length of service, paying an extra 3% for every year of service over 20 years, pensions minister Steve Webb has announced yesterday.

The PPF steps in where a pension scheme collapses paying out a capped level of compensation to those eligible. However, long service had not previously counted.

According to the Department for Work & Pensions, someone who had contributed to a pension scheme for 40 years and accrued a pension pot of £50,000, would receive £45,000 - rather than the current capped amount of £31,380.

Webb said: 'It cannot be right that someone who has been with a company for much of their working life - and relies heavily on that for their pension income - gets the same in compensation as someone with far shorter service and who could also have other pension income to fall back on.

'I want to ensure that those who are or could be affected will in future have their long service recognised in the form of higher compensation.'

But the Confederation of British Industry condemned the move as a burden on business.

CBI director for employment and skills Neil Carberry, said: 'This will come as a bitter blow to firms struggling to drive economic growth and fund their own pension schemes.'
He said the PPF was paid for by businesses and cost more than £600m a year. The levy paid into it was already expected to rise and 'an even greater levy will hold back business investment and growth'.

He added: 'Businesses support the PPF, and would have expected more engagement before this announcement was made.'

Robert Hawkes, head of PPF Services at Barnett Waddingham said the changes affected only a small number of people but the principle made sense.

'Longer-serving members will have had less time to accrue pension benefits elsewhere,' said Hawkes.

'There is also the feeling that those who earn benefits above the cap in a short period of service are likely to be at the executive end of the membership scale and in some cases may have been involved in the decision making for the scheme.'

This article appeared in our June 2013 issue of The Actuary.
Click here to view this issue
Filed in:
06
Topics:
Pensions
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Reinsurance Pricing Lead

England, London
£40000 - £75000 per annum
Reference
118905

Senior Pricing Actuary

London, England
£60000 - £110000 per annum
Reference
118904

Pricing Actuary (Casualty)

England, London
£60000 - £80000 per annum
Reference
118903
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2020 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200