The Pension Protection Fund (Miscellaneous Amendments) Regulations 2012 come into force on 23 July 2012. So what, I hear you cry. Well, the PPF has issued a consultation document about how it intends to implement the changes introduced by this legislation.
The two key changes set out in these regulations are:
- where it is patently clear that a pension scheme has insufficient or excess assets at the time of the qualifying insolvency event, to avoid the delay and expense of obtaining a Section 143 valuation, the PPF may be prepared to look at any Section 179 valuation or other appropriate scheme valuation undertaken in the two years prior to the insolvency event; and
- presently, once a scheme has been unsuccessful in entering the PPF, because it has assets in excess of the PPF liabilities, in order to be considered for re-entry it needs to obtain a "protected benefits" quotation from an insurance company showing that in reality it has less assets than the cost of buying out the full PPF liabilities. Many schemes have been unable to obtain this quotation due to the insurers being unwilling to quote for the business. In order to address this concern, the new regulations mean that so long as the trustees can show that they have taken all reasonable steps to obtain a quotation and the PPF is satisfied that this is correct, the PPF will reconsider the scheme.
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