The Pension Protection Fund (PPF) has confirmed that some members of the British Steel Pension Scheme (BSPS), who made pension transfer requests after 16 February, could see their benefits cut.
FTAdviser reported last month that steelworkers who requested a pension transfer but where trustees failed to process this in time, could see their quoted retirement pot slashed by around 20 per cent.
Around 130,000 steelworkers had to choose by 22 December 2017 it they wanted to move their defined benefit (DB) pension pots to a new scheme being created, BSPS II, or stay in the current fund, set to be moved into the PPF.
Some 25,000 members will end up in the pensions lifeboat, and it is an unknown number of this group who could see their pensions reduced.
If, despite making a transfer request in good time, the BSPS trustees failed to process it by 28 March, the scheme is refusing to guarantee retirees will receive the quoted transfer figures.
This is because the transfers could be processed under PPF rules, which will result in lesser pensions for those not already retired as the lifeboat fund will only pay out a maximum of 90 per cent of rescued members' pensions in that case.
A PPF spokesperson told FTAdviser that the ‘old’ BSPS scheme entered an assessment period on 29 March and the pensions lifeboat is “working closely with the trustees as the scheme moves through the assessment period”.
He said: “Members can be reassured that they remain protected by the PPF.
“Our understanding is that members who submitted valid transfer requests on or before the trustee deadline of 16 February have had their benefits paid out, or they will be paid out shortly, on the basis of the original quotation.
“The scheme is liaising with members who completed valid transfer requests between 16 February and 29 March about their specific circumstances; while most will see no change some may see their transfer value amended to reflect their PPF compensation.”
FTAdviser understands that the pensions lifeboat doesn't know the number of steelworkers that could be affected by this cut, but it is estimating that it will be a very small group.
maria.espadinha@ft.com
