Members could lose £1,000 a month from delayed PPF cap increase
Some people could face losses in excess of £1,000 per month due to delays in increasing the Pension Protection Fund's (PPF) compensation cap, according to estimates.
The figure is based on a freedom of information (FOI) request by the trade union Prospect, seen by PP exclusively.
Prospect's pension officer Neil Walsh wanted to find out how many members are affected by the delay in increasing the cap and how much money they are losing.
In response to the FOI request, PPF said its actuaries estimate it is unlikely more than 0.05% of its total membership is capped. This means "no more than 1150 capped members" are affected based on its membership levels.
Prospect warned it is likely up to 1,000 members could be losing out due to the delay in laying the secondary legislation required to raise the compensation cap.
The PPF's £40m estimate of additional liabilities from raising the cap suggests the average member impacted is looking at an extra £40,000 in payments over the course of the rest of their retirement.
Although there is no information on age, Prospect said some people could be losing in excess of £1,000 per month (3% per extra year of service) due to the delay in increasing the cap.
Walsh said: "The delay in addressing the disproportionate impact of the cap on PPF compensation for members with long service is unfair and distressing to the many hundreds of people concerned.
"The fact that the increase in the cap will not be retrospective means their losses are only growing and makes a bad situation worse. The legislation needed to resolve this must be laid at the earliest possible opportunity."
In 2014, Parliament passed legislation to increase capped PPF payouts for long-serving staff who had been with their respective firm for more than 20 years.
Former pensions minister Ros Altmann has revealed the government had been due to lay down the regulations last week and said further delays were a huge injustice to members.
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