If we’ve confirmed to you that you will be moving into the Pension Protection Fund (PPF), then this page applies to you.
The old scheme is due to start moving into the PPF on 29 March 2018. At that point, a PPF ‘assessment period’ starts. During the assessment period, the PPF and others check that the information about members moving into the PPF is accurate, and that pensioners are getting the correct benefits. The PPF also assesses the scheme’s funding level. A valuation must be carried out to see if the scheme can buy annuities from an insurance company at least equivalent to PPF compensation or if the scheme must (as expected) go into the PPF. This work has to be done before the scheme can move fully into the PPF.
From 29 March 2018, the old scheme will formally be known as the ‘Old British Steel Pension Scheme’.
There will be no break in your pension payments – you’ll carry on getting them every month.
If on 29 March you are over your normal retirement age (usually 65) or are receiving a spouse’s, dependant’s or incapacity pension, the PPF won’t reduce your pension. For all other members, the PPF will give you 90% of what you’re receiving. So for every 10 pounds you’re receiving, the PPF gives you 9 pounds. This could be reduced further if a cap applies. There’s more about this on the PPF’s website. If your benefits are reduced, you’ll be told in advance when this is going to happen.
PPF benefits are known as ‘compensation’. The PPF pays compensation in advance on the first day of the month, which might be different from when you get your pension at the moment. This change of day is likely to happen from 1 May 2018.
The PPF pays annual increases at a different time from the current scheme. The PPF pays these increases on the 1st January each year. So, for members who get increases, the first increase date will be 1st January 2019.
If you plan to start taking your pension soon, please think about whether you start before or after 29 March 2018.
Before 29 March 2018, your benefits would follow the old scheme’s rules. From 29 March 2018, they would follow the PPF’s rules. This means, for example, that if you start taking your benefits after 29 March 2018, you might be able to take advantage of the PPF’s more favourable terms for early retirement and tax-free cash.
If you start taking your benefits after 29 March 2018, the amount you get will depend on when you reach your normal retirement age (usually 65). If you reach it after 29 March 2018, you will get 90% of what you’re expecting. So for every 10 pounds you’re expecting, you’ll get 9 pounds. This could be reduced further if the PPF cap applies. Before your pension is paid, you will get a letter to tell you if this applies to you. If you reach your normal retirement age on or before 29 March 2018, your pension won’t be reduced.
There’s more about PPF levels of benefits – known as ‘compensation’ – on the PPF’s website.
Our Questions and Answers page has a section all about the PPF. It also has other sections covering other questions members have asked us. Now that the deadline for choosing your option has passed, some of these questions are not relevant any more. But many of the others could still be useful, so we have left them all available to read.
Barnett Waddingham is taking over the administration of the old scheme. This handover will be complete by 29 March 2018. Before the end of March, you’ll get more information about them, and what’s happening next. If you have any questions, please contact Barnett Waddingham. You’ll get a letter with their contact details.
You can also find more information about the PPF here.
Newsletters, videos and other information.
Your benefits under the current British Steel Pension Scheme are governed by its trust deed and rules. If you switch to the New British Steel Pension Scheme, your benefits will be governed by its trust deed and rules. If you move to the Pension Protection Fund, your benefits will be governed by the law that relates to the PPF. Your personal information pack and this website only summarise the main information about choosing your option.