Applications to the Pension Protection Fund double

Applications to the Pension Protection Fund – the government’s pensions safety net for struggling pensions funds – have leapt by more than 50% in the first quarter of 2006, as the turbulent trading environment continues to bite.

The Financial Times reports that the PPF is currently assessing 63 retirement schemes to decide whether they have sufficient assets to pay more than the minimum entitlement offered by the safety net. This is in contrast to about 30 reported before Christmas 2005.

The Pension Protection Fund, which was launched in April 2005, provides compensation for members of underfunded pension schemes when an employer becomes insolvent. During the assessment period, which is likely to last for a minimum of one year, stringent restrictions are put on the pension scheme.

The fund has reported that the first scheme (as yet unnamed) to pass its trial and enter the safety net will do so by the end of 2006.

Pensions Watch

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