Nowadays, pension scheme trustees have to declare the identities of a scheme’s statutory employers every year on the scheme return. There’s a reason for this: trustees have to be vigilant to the risk of being left without a statutory employer and therefore losing members the protection of the Pension Protection Fund. It isn’t always obvious it’s happening. Bulk transfers and employer substitutions can cause problems if you don’t plan ahead, and it is a risk which is ever increasing as more and more schemes are closed to future accrual. (more…)

“I ain’t afraid of no ghost!” I hear you say.  Well, if you’re a pension scheme trustee with a ghost guarantor, maybe you should be! 

The Pension Protection Fund contingent asset regime’s been with us for a few years now.  Underfunded pension schemes get lower PPF levies if they’ve got a funding guarantee from a guarantor that has a lower insolvency risk than the scheme’s own sponsoring employers.  But it’s come to the PPF’s attention that some guarantors mightn’t be quite what they seem – the ghost guarantors! (more…)

Earlier this month Chris Jackson posted on the changes that have been made to PPF Type A guarantees under this year’s Pension Protection Fund levy determination, published in December 2011.  Whilst Type A guarantees are by far the most popular type of contingent asset for PPF purposes, we do have a number of clients who have put in place or are looking to put in place Type C letters of credit.  However the current Eurozone crisis is reducing the number of financial institutions that can meet the right criteria. 

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