To continue reading please register or login to your OHW+ account.
Employees are understandably concerned about the safety of their retirement savings when they read about insolvencies or the collapse of big company pension funds. This is why it's crucial to communicate the robust protections that exist to preserve them, according to Katherine Easter.
In a year where the news agenda has been relentless, high-profile company insolvencies – and their impact on associated pension schemes – have still managed to grab the headlines.
Against this backdrop of economic uncertainty, it’s reasonable to conclude that many defined benefit (DB) schemes members are concerned about the safety of their personal finances and pensions.
But what perhaps you, and many of your employees might not know about, are the robust pension protections that exist in the UK to safeguard the financial futures of millions of UK pension savers in a worst-case scenario.
If a company has an associated DB pension scheme, members of the scheme can be reassured that if the worst were to happen and their employer failed, their pensions would be in the safe hands of the Pension Protection Fund (PPF).
What protections are in place?
The PPF provides pension protection for members of private sector DB pensions across the UK in the event of employer insolvency.
This means any employees who currently pay into or have previously paid into their employer’s associated UK DB pension scheme (excluding public sector schemes) will be protected if their employer fails. The days of people losing the pensions they’d saved their whole lives for are thankfully behind us.
Our protection follows employees too – regardless of the health of the organisation, and how long an employee stays with the business before retiring or moving to a new job.
This means that PPF protecti