Pension Protection Fund publishes on its website:
We’re pleased to announce that we’ve partnered with Aviva, who will provide us with a defined contribution (DC) discharge solution.
As we’re only able to pay defined benefit (DB) pension benefits, when a PPF eligible pension scheme with a DC element experiences an employer insolvency, these benefits must be transferred to a DC discharge provider like Aviva. Until this happens, we cannot complete the transfer of the pension scheme.
We protect the 9.6 million members of defined benefit (DB) pension schemes if their employer becomes insolvent.
However, some pension schemes, known as hybrid schemes, have both a DB and DC element to them.
When these pension schemes enter the PPF because of employer insolvency, we can’t transfer the DC element of the schemes as we’re unable to pay this type of pension benefit.
When pension schemes enter our assessment period, it’s important that these benefits are taken on by a third-party provider as quickly as possible to prevent a delay to schemes transferring and give certainty to members on who will pay their benefits in the future.
That is why we have recently partnered with Aviva, who are providing a Master Trust solution to ensure that members’ DC benefits are protected.
While trustees will have the comfort that the Aviva Master Trust will be available for all DC benefits, this won’t prevent them from looking at the options available to them in the wider DC market to make sure that members are receiving the best possible outcome.
Matt Bayman, Director of Scheme Services, said “We look forward to working with Aviva who, through their Master Trust solution, will ensure that we can efficiently transfer schemes and, most importantly, help us to achieve the best results for members both inside and outside of the PPF.”
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