How safe is an occupational pension?
High-profile cases of firms going bust and employees losing their final salary pensions, pension schemes being wound up and large companies under-funding their schemes to leave a ‘black hole’, have all called into question whether or not your money is safe in a company pension scheme. To try to reassure people the government has tightened up pension regulation. Trustees are responsible for seeing that the scheme is run correctly, overseen by the Pensions Regulator. However, if something does go wrong the Pension Protection Fund (PPF), set up in 2004, compensates members of final salary pension schemes which have failed. On retirement, people receive 90% of the value of their pension up to a “cap”. Any benefits built up since 1997 will be increased each year in line with inflation (up to a maximum of 2.5%). For final salary pension schemes that failed prior to 2004 compensation is at the same level, but provided through the Financial Assistance Scheme. If you are in a money purchase sch
