Running the Pension Protection Fund (PPF) – the government’s ‘lifeboat’ scheme for failing company pensions – is not for the faint-hearted. The PPF’s first chief executive, Myra Kinghorn, resigned just 11 months after the fund was launched.
She cited the need to “redress her work-life balance” – basically, a euphemism for “I’m completely knackered”. This is not surprising since the PPF is a world first, after all.
The new chief executive, Partha Dasgupta, has been in place since June.
Previously, he was the fund’s director of investment and finance and oversaw the management of the PPF’s assets, investments and finances. His remit also included the multimillion-pound levy that about 9,000 companies with final salary pensions are going to have to pay from this autumn to bail out failed schemes.
Setting sail
For Dasgupta, all the pressure that led to Kinghorn jumping ship is just beginning. “The real work of the PPF hasn’t really started yet,” he said.
Payments to those who have lost their savings – the raison d’être of the PPF – will begin this autumn. The first levy bills will land on corporate doormats in September.
This means Dasgupta is going to be working very hard on communication to inform and, one imagines, placate some angry employers. Some 60% of respondents to a recent CBI survey said they thought the level of the levy was unfair.
“There was a broad consensus that it was right to have a levy,” he said. “But if we are going to provide compensation, we need to ensure it is adequately funded.”
The PPF will be sending out a comprehensive briefing on the risks that the fund has assessed and how they are distributed. It will be called the pensions universe risk profile, or Purple for short.
This is designed to persuade employers that they do not need to fear the PPF. As Dasgupta said: “The PPF does not want customers.”
Staying afloat
Although the reassurances are important, Dasgupta’s key tasks are to ensure that investments are managed effectively and that “we pay the right amount to the right people at the right time”.
Dasgupta is keen to heap praise on employers, who he thinks are being “very responsive and responsible” with how they are managing their assets.
However, this does not distract him from those the PPF is there to help: the workers who lose large chunks of their savings when their occupational pension schemes collapse.
“We have 67,000 people under assessment. Prior to the PPF, they would have lost a significant part of their payments,” he said. “Now they know there is compensation that will be paid.”
Dasgupta now has three years to make it happen. If he stays the full course, like the PPF itself, it will be a first.
A brief history of the Pension protection fund
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
- November 2004 – Pensions Act 2004 establishes PPF.
- April 2005 – PPF becomes fully operational. Levy estimated at £300m.
- December 2005 – New estimates show levy will cost employers £575m.
- April 2006 – Deadline passes for companies to cut levy costs through PPF incentives.
- August 2006 – PPF chief executive Partha Dasgupta reveals the levy could be lower than expected.
Dasgupta’s CV
- June 2006 – Chief executive, Pension Protection Fund
- January 2005 – Director of investment and finance, Pension Protection Fund
- 1995-2005 – Barclays Global Investors in senior roles on portfolio management, trading, investment strategy, business management and product development
- 1991-1995 – Valuation analyst, Prudential