IP analysis: The Court of Appeal has overturned the controversial High Court decision in the Emotional Perception case. The court decided that Artificial Neural Networks (ANNs) should be treated as computer programs that engage the exclusion in patent law. ANNs can still be patentable but only if they involve a technical contribution. In that sense, the court decided that there is nothing special about machine learning, and patent law should treat it in the same way as any other computer program. The invention in this case related to a media file recommendation, and this was found not to involve a technical contribution, overturning the decision of the High Court. Written by Peter Arrowsmith, partner at Gill Jennings & Every.

This Practice Note sets out the criteria for the Pension Protection Fund to pay compensation to the members of an occupational pension scheme and the method and consequences of assessment for entry into the scheme in the context of family proceedings. It also sets out the implications in relation to divorce/dissolution proceedings, the relevant procedure within financial remedy proceedings, and the scope of the separate Financial Assistance Scheme. The Pension Protection Fund (PPF) was set up by the Pensions Act 2004 (PeA 2004) as a statutory corporate body, which manages funds to pay compensation to members of certain occupational pension schemes where: • the pension scheme is an eligible scheme • a ‘qualifying insolvency event’ has occurred in relation to the employer, or the employer is unlikely to continue as a going concern and meets the conditions in the Pension Protection Fund (Entry Rules) Regulations 2005, SI 2005/590, reg 7 • there are insufficient assets in the pension scheme to meet the defined benefits payable, and • the pension fund

THIS PRACTICE NOTE APPLIES TO DEFINED BENEFIT AND HYBRID OCCUPATIONAL PENSION SCHEMES What is the Pension Protection Fund? The main function of the Pension Protection Fund (PPF) is to pay members' benefits up to a certain level in the form of compensation where a qualifying insolvency event has occurred in relation to a sponsoring employer of an eligible pension scheme. Where a qualifying insolvency event occurs in relation to a sponsoring employer of an eligible pension scheme, the scheme enters an assessment period during which the PPF assesses whether the scheme satisfies the criteria for entry into the PPF. The PPF also has other functions which fall outside the scope of this Practice Note, including: • running the Financial Assistance Scheme (FAS). The FAS is a scheme set up by the government to provide a minimum level of benefits to members of qualifying pension schemes who would otherwise lose all or part of their pension benefits because their pension scheme wound up when underfunded. The FAS closed to notification and qualification of new schemes on 1 September 2016. In

What is an assessment period? When a qualifying insolvency event occurs in relation to a sponsoring employer of an eligible scheme, the scheme will enter a Pension Protection Fund (PPF) assessment period on the occurrence of that event. The date on which the assessment period begins is called the ‘assessment date’. Note that since 3 January 2012, the assessment period is no longer required to last for a period of at least 12 months. During the assessment period, the PPF will assess whether the scheme meets the requirements for entry into the PPF. In particular, the PPF will instruct an actuary to carry out a valuation of the scheme as at the assessment date to assess whether the scheme's assets are less than the protected liabilities (broadly, the benefits the PPF would pay to members if the scheme entered the PPF). The PPF will accept a scheme into the PPF if: • its assets are less than the protected liabilities, and • a scheme rescue is not possible For further information

FORTHCOMING CHANGE: Section 10 of the Finance Act 2022 will increase the normal minimum pension age (NMPA) from 55 to 57 on 6 April 2028 (save for members of the firefighters, police and armed forces public service pension schemes). The Finance Act 2022 will also give members of registered pension schemes a right to take their benefits before age 57, if on or before 4 November 2021 they either had an ‘unqualified right’ to take benefits or were in the process of a substantive transfer to a scheme offering an unqualified right to a protected pension age of less than 57 on or before 4 November 2021. To benefit from this new 2028 protection, the rules of the pension scheme must have included (on 11 February 2021) an unqualified right to take the entitlement to scheme benefits before age 57. For further information, see Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact. When is PPF compensation payable? Where the Pension Protection Fund (PPF) assumes responsibility for a scheme, it must pay

THIS PRACTICE NOTE APPLIES ONLY TO DEFINED BENEFIT AND HYBRID OCCUPATIONAL PENSION SCHEMES Determining normal pension age under the scheme’s admissible rules Members’ normal pension age under the scheme’s admissible rules needs to be ascertained so that: • an eligible scheme can provide the Pension Protection Fund (PPF) with an actuarial valuation of the scheme’s assets and protected liabilities at prescribed intervals for the purpose of enabling the PPF to calculate risk-based pension protection levies • where the scheme is in an assessment period, the PPF can obtain an actuarial valuation of the scheme’s assets and protected liabilities as at the relevant time • the PPF can ascertain the date from which compensation will be paid to an individual (and the level of that compensation) under the pension compensation provisions of the Pensions Act 2004, s 162 and Sch 7 (PeA 2004) For further information on how to determine a scheme’s admissible rules, see Practice Note: The Pension Protection Fund—what are the admissible rules of

Requirements for PPF entry The requirements for a scheme to enter the PPF are: • the scheme must be an eligible scheme—see: What schemes are eligible? below • either: ◦ a qualifying insolvency event must occur in relation to a scheme employer—see: What is a qualifying insolvency event? below, or ◦ the employer is unlikely to continue as a going concern and it meets the conditions in SI 2005/590, reg 7—see: Alternative route to PPF entry, below • the insolvency practitioner in relation to the employer must confirm that a scheme rescue is not possible—see: Duty of insolvency practitioner to issue notices confirming status of scheme (section 122 notices), and • the assets of the scheme must be less than the 'protected liabilities' (broadly, the benefits that would be payable to members by the PPF)—see: Protected liabilities, below The statutory provisions regarding the eligibility of schemes for entry into the PPF are contained in: • sections 120–168 of the Pensions Act 2004 (PeA 2004) • the Pension Protection Fund (Entry Rules) Regulations

In order to determine whether a multi-employer scheme qualifies for PPF entry and how the scheme is treated for PPF purposes, and to calculate the PPF risk-based levy, it is necessary to understand whether the scheme is a segregated scheme or a non-segregated scheme. It is also necessary to understand what the rules of the scheme require on withdrawal of one of the participating employers, ie: • partial wind-up • no partial wind-up, or • the trustees are given the choice of implementing a partial wind-up For more information on PPF entry, see Practice Note: The Pension Protection Fund—eligibility and entry. For more information on the PPF risk-based levy, see Practice Note: The Pension Protection Fund—the pension protection levy. PPF entry and multi-employer schemes Where a scheme has only one participating employer, it is a single-employer scheme for PPF purposes. However, where a scheme has more than one participating employer, it is a multi-employer scheme and different considerations apply. The Pension Protection Fund (Multi-Employer Schemes) (Modification) Regulations 2005,

Unless the Pension Protection Fund (PPF) chooses not to charge a levy or unless the scheme is exempted, eligible schemes have to pay a pension protection levy for each levy year (which runs from 1 April to 31 March). The PPF may impose a risk-based levy on eligible defined benefit pension schemes to help fund the PPF and the compensation payable when a sponsoring employer becomes insolvent and its scheme is insufficiently funded. For conventional schemes, the levy is calculated principally by reference to the likelihood of employer insolvency and the potential size of the resulting claim on the PPF. This Practice Note is mainly relevant to those levy years in which the PPF imposes a risk-based levy. For 2025/26, the PPF recalculated the conventional levy payable by schemes with substantive sponsoring employers to zero. Separate risk-based levy rules continued to apply to Alternative Covenant Schemes (ACSs). For 2026/27, both the scheme-based and risk-based levies are zero for schemes that are not ACSs, but ACSs remain

The Pension Protection Fund (PPF) is a statutory fund established under the provisions of the Pensions Act 2004 (PeA 2004) whose principal purpose is to provide compensatory benefits to members of eligible defined benefit (DB) occupational pension schemes where: • the scheme’s sponsoring employer(s) has suffered a qualifying insolvency event, and • the scheme’s funding position is such that its net assets are less than its ‘protected liabilities’. Broadly speaking, protected liabilities are measured by reference to: ◦ the cost of securing members’ benefits corresponding to the levels of compensation the PPF would provide if it accepted responsibility for the scheme ◦ other (non-benefit related) liabilities of the scheme, and ◦ the estimated cost of winding-up the scheme For further information, see Practice Notes: The Pension Protection Fund—an introduction and The Pension Protection Fund—eligibility and entry. Funding the PPF Pension protection levy Unless the PPF chooses not to charge a levy or unless the scheme is exempted, eligible schemes have to pay a pension protection levy for

THIS PRACTICE NOTE APPLIES ONLY TO DEFINED BENEFIT AND HYBRID OCCUPATIONAL PENSION SCHEMES Purpose of admissible rules During an assessment period, the trustees must operate the scheme and pay benefits to members in accordance with the admissible rules of the scheme (as defined in paragraph 35(2) of Schedule 7 to the Pensions Act 2004 (PeA 2004). The Pension Protection Fund (PPF) issued guidance for trustees on how to apply the admissible rules during the assessment period, together with examples, in the Appendix to the Financial Management section of its Detailed Trustee Guidance. This guidance was archived when the PPF changed its website in December 2018, but it remains useful to understand what constitutes an admissible payment. At the end of the assessment period, if the PPF assumes responsibility for the scheme, and the scheme enters the PPF, the PPF will pay compensation to members and their dependants, determined in accordance with PeA 2004, Sch 7. A member or other beneficiary will be eligible

THIS PRACTICE NOTE APPLIES ONLY TO DEFINED BENEFIT AND HYBRID OCCUPATIONAL PENSION SCHEMES In most cases, the process of entry into the PPF will begin when the sponsoring employer of an eligible scheme suffers a qualifying insolvency event. For a scheme to qualify for entry into the PPF, its sponsoring employer must meet the statutory definition of ‘employer’ for that purpose. The definition of ‘employer’ varies depending on whether: • the scheme is a single-employer scheme or is/has been a multi-employer scheme • the scheme has active members at the date of the qualifying insolvency event Definition of employer under section 318 of the Pensions Act 2004 Under section 318 of the Pensions Act 2004 (PeA 2004), an employer in relation to an occupational pension scheme is defined as the employer of ‘persons in the description of employment to which the scheme in question relates’ (the ‘relevant employees’). Case law currently indicates that relevant employees include: • active members of the scheme—note the case G4S v G4S Trustees