The Pensions Act 2004 (Amendment) (Pension Protection Fund Compensation) Regulations 2023

The Pensions Act 2004 (Amendment) (Pension Protection Fund Compensation) Regulations 2023 were published on legislation.gov.uk, the official UK platform for publicizing legal documents. The amendment regulations amend various pensions acts, specifically the Pensions Act 2004, Pensions Act 2008, and the Pensions Act 2011, to ensure that following the sunset of various EU regulations on December 31, 2023 as provided for in the Retained EU Law (Revocation and Reform) Act 2023, the Pension Protection Fund (PPF) still applies to circumstances when a sponsoring employer becomes insolvent and the pension scheme doesn’t have enough assets to cover the promised benefits. With the sunset of corresponding EU legislation, the PPF would no longer be available in such cases.
Therefore, the new amendment regulations provide new provisions in the Pensions Act 2004 to set out the calculation basis for the PPF, to stipulate the application of the PPF, and to set out a minimum threshold of at least 50% of the value of accrued pension benefits to be paid to scheme members (regulation 3). Also, the amendment regulations remove the PPF cap (compensation cap) in the Pensions Act 2008 that was previously installed for scheme members that had not yet received their retirement age, and make consequential amendments to the Pensions Act 2011.
The amendment regulations come into force right before the sunset of corresponding EU retained regulation, that is December 31, 2023.