UK - Following Independent Trustee Services' (ITS) appointment to two of the underfunded MG Rover Pension Schemes it has confirmed that its objective is for each scheme to enter the Pension Protection Fund.
TS has also confirmed to those members who are already in receipt of a pension, that this will be continued at the current level for the time being.
If ITS is successful in its objective of Pension Protection Fundentry for the schemes, then pensions in payment will then be at the level of Pension Protection Fund benefits.
Commenting on the two Schemes, Chris Martin, managing director, ITS, said: “It is vitally important that all scheme members understand the levels of Pension Protection Fund compensation which may be available if the schemes ultimately satisfy the entry criteria for the Pension Protection Fund.
“Based on initial actuarial advice received by ITS, both schemes are underfunded and the level of benefits available from the Pension Protection Fund at normal Scheme pension age (65) are likely to be greater, for the vast majority of members, than the benefits available if the schemes had to wind up by purchasing annuity policies with an insurance company.
“This, of course, has been a significant issue for many schemes which started to wind up before the Pension Protection Fund came into force this April”.
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