The Pension Protection Fund

The Pension Protection Fund (PPF) was established on 6 April 2005 as a statutory fund to pay compensation to members of underfunded defined benefit occupational pension schemes whose sponsoring employer has become insolvent.

The statutory provisions governing the operation of the PPF are contained in the Pensions Act 2004 (PeA 2004), ss 107–220 and Sch 7, and underlying regulations.

For an outline of the operation of the PPF as a statutory compensation fund and how it interacts with defined benefit and hybrid occupational pension schemes, see Practice Note: The Pension Protection Fund—an introduction.

Entry and eligibility

Schemes must satisfy certain statutory requirements to be eligible for entry into the PPF. In particular, a scheme must be an eligible scheme, and a qualifying insolvency event must have occurred in relation to a sponsoring employer.

Not all schemes are eligible for entry into the PPF, eg money purchase schemes or schemes in winding-up immediately before 6 April 2005. Certain other types of scheme are specifically excluded from entry into the PPF.

The PPF will also only assume responsibility for a scheme if the scheme's assets

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Pensions News

TPR calls for elevated trustee governance standards for DB schemes in the era of pension surpluses within a changing pensions landscape

David Walmsley, Director of Trusteeship, Administration and DB Supervision at the Pensions Regulator (TPR), gave a speech at the DB Strategic Investment Forum entitled 'Securing benefits and investing for growth: the changing nature of defined benefit pensions' on 16 September 2025. TPR’s speech emphasises that trustees and administrators must redefine their roles to meet emerging challenges in the defined benefit (DB) pension landscape and are urged to acknowledge that a significant shift has occurred in scheme funding, as most schemes are now in surplus. Trustees are encouraged to work with advisers and employers early and re-examine funding strategies to ensure that valuation submissions under the new DB funding regime are robust - paying particular attention to long-term objectives, investment strategy, covenant strength, and recovery plans. Ultimately, trustees and administrators are warned that they must combine professional expertise with robust governance to manage modern pension schemes effectively. TPR confirmed that it is currently concentrating on issues frequently raised by the market, particularly the role of professional trustee firms and is assessing how these governance models function and handle potential conflicts, especially in integrated service arrangements. To encourage strong governance practices, TPR is due to issue guidance to clarify trustee expectations and showcase best practices. In parallel, TPR is collaborating with the government on an upcoming consultation aimed at developing a modernised regulatory framework for trusteeship and governance. Furthermore, a new strategy will soon be published, setting out TPR’s priorities and approach to improving trusteeship standards through compliance and oversight, with an industry consultation scheduled for the autumn.

Pensions weekly highlights—18 September 2025

This week’s edition of Pensions weekly highlights includes a review of key news stories, as well as dates for your diary and trackers.

IFoA research calls for legal reforms to modernise UK pension system

The Institute and Faculty of Actuaries (IFoA), in partnership with Ipsos, has published research calling for urgent reform of the UK pension system to better reflect modern working lives. The report finds that the current system, designed for uninterrupted careers with single employers, systematically disadvantages self-employed individuals, part-time workers, and those with disrupted work patterns, contributing to persistent pension gaps and increased risk of retirement poverty. Drawing on filmed interviews and actuarial analysis, the study reveals that these gaps are rooted in systemic design rather than personal choice. It recommends measures such as flexible auto-enrolment for the self-employed, early savings initiatives, improved communication around life events, community-based pension models, and a national pensions literacy strategy. These proposals aim to ensure the system remains inclusive, adaptable, and capable of delivering adequate retirement income for all.

GAD review finds LGPS Scotland funds all in surplus with £60bn total assets

The Government Actuary’s Department (GAD) has published its review of the 2023 actuarial valuations of the Local Government Pension Scheme (LGPS) in Scotland, as required under Section 13 of the Public Service Pensions Act 2013. The review found that all 12 constituent funds—covering approximately 600,000 scheme members—reported surpluses as of March 2023, with total assets amounting to £60bn and an aggregate funding level of 141%. This represents an improvement compared with 2020, when four funds were in deficit. The report also highlighted variations in the funds’ approaches to surplus management and recommended that additional guidance be provided to address intergenerational fairness considerations. GAD has advised Scottish Ministers, through the Scottish Public Pensions Agency, to continue engaging with stakeholders on consistency measures and to review climate risk analysis principles in advance of the 2026 valuations.