The Financial Services Compensation Scheme and Fraud Compensation Fund have signed a memorandum of understanding to facilitate compensation payments relating to financial losses from occupational pension schemes.
The FCF is managed by the Pension Protection Fund which pays compensation to eligible occupational pension schemes where the employer is insolvent and the financial loss is a result of dishonesty.
Under the memorandum the parties will aim to work together in the public interest to mitigate any potential double recovery of compensation as well as exchange any useful information regarding claims and recoveries.
This will include the FCF sharing names of schemes - with consent - which are the subject of an FCF application at appropriate intervals which the FSCS will then check and confirm whether that scheme is involved in any FSCS claims.
If the scheme is involved in a claim and also is subject to an FCF application both parties will coordinate with each other to support both their claims processes.
Both parties have signed the memorandum on a voluntary basis with no legal or procedural rights or obligations which can be enforced by either party.
This agreement will be reviewed annually and will remain in effect until either party decides to terminate it.
In December the PPF cut its final levy for 2024-25 by 50 per cent to £100mn meaning all eligible DB schemes are expected to see further reductions in their levy this year.
alina.khan@ft.com
