I read Alison Steed's opinion piece Early bird gets the worm (FA, 14 September) with interest. It is indeed “vital that people understand the importance of taking financial advice before they make their decisions”. Those in the position of advising members have a responsibility to get the facts straight.
However, incorrect comments such as, “the Pension Protection Fund will significantly reduce any benefits you might receive”, are sadly part of the problem.
Pensioners will continue to receive exactly the same benefits as they did immediately prior to the insolvency of the sponsor, though their future indexation may be reduced.
Similarly, deferred members will normally see a 10 per cent reduction in their accrued entitlement, unless they are part of the extremely small group of members affected by the PPF benefit cap.
Against this needs to be set the value of the cash commutation option, early retirement option and survivors’ benefits, which may be better for the member in the PPF than the average scheme.
We would therefore encourage any adviser to make use of the resources we provide on our website to help members understand the value of PPF protection and compensation.
Alan Rubenstein
Chief executive
Pension Protection Fund
