In February, the Pension Protection Fund (PPF) published its first edition of Technical News, intended to provide practical guidance on topical issues to schemes in PPF assessment periods. This accessible, practical newsletter covers:
- The implications of ITS v Hope (a High Court case reviewed in our bulletin here and which, essentially, used public policy to strike down an attempt by pension scheme trustees to buy-out benefits in a way which would secure the best deal for members but which would have increased PPF liabilities). Not surprisingly, the PPF points out that trustees need to be wary of attempts to "game" the PPF; however, it also notes that the Court accepted that there would be occasions where the existence of the PPF would be a legitimate consideration for trustees (for example, when considering whether to trigger an insolvency event).
- The equalisation of GMPs. The PPF acknowledges the ministerial statement reported in our bulletin here, which confirmed the need to equalise GMPs regardless of whether comparators can be identified. The PPF will make an announcement on this "in the near future".
- It confirms that where scheme rules provide for a terminal illness lump sum to be paid to qualifying members, these members will be entitled to the lower of the terminal illness lump sum that would be provided under the PPF compensation provisions and the benefits provided under the scheme rules.
- The PPF confirms that, in light of the increase in the minimum pension age from age 50 to age 55, all early retirement applications in relation to schemes in an assessment period should be processed before the scheme transfers to the PPF; failure to do so will extinguish the unprocessed early retirement requests.