Partner Vikki Massarano comments in the Financial Times on what the Hughes judgment on PPF’s cap on compensation payments means for affected members
Since 2005 about 600 high earners, including senior executives, managers and pilots, have seen their expected retirement income cut significantly, after the Pension Protection Fund (PPF) — the industry lifeboat — took over the payment of their pension.
The cut occurred due to a cap that PPF applies to the compensation it pays to people who are under their normal retirement age who fall under its protection. But this week the High Court ruled the cap was unlawful on age discrimination grounds.
On what it means for members if they have had payments capped, Vikki commented:
“According to the judgment, the cap should not have been applied at all, so these members should have received PPF compensation of 90 per cent of their scheme benefits at the time payments started. Affected members should be able to claim the difference between that compensation and the capped amount they have received.”
“People who are affected should see their PPF payments increase going forwards and also receive some back payments.”
“The court said a six-year limitation period would apply, which will limit the amount of back payments.”
The PPF has estimated the cost of removing the cap at around £240m.
Read Vikki’s comments in the Financial Times.
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