Connected Research

Union policy research in the 21st century

PPF publishes 2008/09 annual report

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The Pensions Protection Fund has published its annual report for year end 31 March 2009.

In a sign of the recession, the PPF has seen a rise in the number and value of schemes transferring to it. Nearly 31,000 people are now covered by the PPF, of whom some 13,000 are already receiving pensions, while a further 179,000 are in a total of 290 schemes being assessed at the end of the year. This has led to the deficit in the PPF rising from £517m in 2007/08 to £1.23bn in 2008/09 – although the PPF believes that the lack of big claims since March and improvements in the financial markets have seen this drop back to below £1bn. The PPF now commands assets of nigh-on £3bn, while schemes in assessment will add a further £5.9bn (and liabilities of £8.8bn).

Despite this, the levy on all occupational defined benefit schemes, by which the PPF funds its shortfall, will remain at £700m for 2009/10.

Lawrence Churchill, Chair of the PPF, said that the figures and the deficit were expected and that the recession had highlighted the value of the Fund, as well as the ‘resilience’ of its framework ‘in testing times’. Clearly he’s right that no-one wants a situation in which workers lose their pension as well as their job (in a formal recession or at any other time).

Interestingly, PPF levels of compensation average around £4,000 per annum (and around £1,940 for women). This is substantially lower than the average occupational pension income of more than £8,000 per annum, as revealed in the DWP’s 2007/08 Family Resources Survey. This may itself be a little on the high side, since Incomes Data Services’ Pensions Bulletin (September 2009) suggests that the average pension in payment is around £5,820 per annum, but it does indicate some likely pointers as to the size, income levels and relative maturity of schemes entering the PPF so far.

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Written by Calvin

06/11/2009 at 3:45 pm

Posted in Pensions

Tagged with ,

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