UK - The Pension Protection Fund (PPF) today begins its first direct payments to UK pensioners.
A total of 46 retirees from three pension schemes will receive PPF compensation from today, with a further 229 members from the schemes on the deferred compensation list. The pensions to be paid out range from £260 to £24 850 p.a.
The schemes in question are the Chilton Scotland Pension Scheme (sponsoring employer: Chilton Scotland); the Padiham Retirement Benefits Plan (sponsoring employer: Perseverance Mills Ltd); and the BDH Retirement Benefits Scheme (sponsoring employer: Hamilton Machinery Sales Ltd).
Although 90 000 people in the UK already receive PPF protection (with 30 000 of them receiving PPF-level benefits), today marks the first time the PPF has taken over direct control of benefit payment from trustees.
Lawrence Churchill, PPF chairman, commented: "The first compensation payments being made directly from the PPF complete the final phase in the PPF's development. We were set up to pay compensation and now we are doing so.
"From here on in there will be a continuous flow of schemes completing their assessment period and their pensioners will feel reassured that their income every month comes from a known, trusted and stable source."
Although the schemes receiving direct payment today are small, Partha Dasgupta, PPF chief exectuive, said a further seven schemes, with a total of 6,000 members, were expected to start receiving direct payments by the end of the financial year.
The PPF targets an investment return of 1.4% outperformance of its liabilities. Between July 2005 - when it started investing - and the end of March 2006, it recorded returns of 5.9% on £130m of assets.
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