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Pensions

House of Lords written question – answered on 10th July 2013.

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Photo of Lord Laird Lord Laird Non-affiliated

To ask Her Majesty’s Government how many current and future pensioners respectively are involved in the transfer of the Polestar Pension Scheme to the Pension Protection Fund (PPF); what annual extra expenditure its transfer to the PPF will involve; and what reductions have been made in pensions to Polestar members.

Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions

At the time the scheme went into a Pension Protection Fund (PPF) assessment period there were 7,776 members in the scheme, of whom 4,206 were pensioners and 3,570 were deferred members.

The scheme valuation conducted for entry to the PPF showed the scheme had £362 million in assets and £672 million worth of liabilities. The shortfall between assets and liabilities will have to be made up by the PPF itself.

The PPF does not offer the same level of benefit as would have been provided under the scheme pension promise. The PPF is a compensation scheme, whose aim is to pay a meaningful level of compensation to members.

In general, the PPF pays the 100 per cent level of pension compensation to those who have reached their scheme’s normal pension age at the start of a PPF assessment period, and the 90 per cent level of pension compensation for those below their scheme’s normal pension age, subject to the compensation cap. The precise amount of compensation expenditure the PPF will incur will depend on the individual pension rights accrued by members of the Polestar scheme and unknowable factors such as individual longevity.

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