-Following lengthy consultation, PPF confirms GMP calculation method
-Announces six month pilot project to test methodology
-Applies to PPF schemes in assessment and to PPF members
-FAS will request data so it can adjust FAS assistance
-Approach most appropriate for PPF needs and meeting legal obligations
The Pension Protection Fund (PPF) today (Thursday) confirmed how it will calculate compensation for men and women being assessed for entry into the PPF - or who are already PPF members - to ensure the equal treatment of men and women required by law.
But, before applying the method to all pension schemes in the PPF assessment period, it will undertake a six month pilot project with selected schemes to iron out any teething problems.
As the manager of the Financial Assistance Scheme (FAS), the PPF will also ask affected FAS schemes in wind-up for data to enable it to adjust the calculation of assistance payments. To help schemes do this, the PPF will issue revised guidance shortly.
PPF Executive Director for Financial Risk, Martin Clarke, said: "We have deliberated long and hard on this complex issue, consulting with stakeholders, seeking expert advice and undertaking in-depth actuarial work. We can now confirm a method which we believe to be the most satisfactory approach for our needs and for meeting our legal obligations.
"But, to make sure the method works as well as it can, we will undertake a six month pilot with selected schemes. This enables us to put this calculation method through its paces so that it is fit-for-purpose when we roll it out to cover all PPF schemes in assessment.
"I would like to take this opportunity to thank all those in the industry who have provided us with invaluable help while developing this calculation method."
Alongside this announcement, the PPF published its response to the consultation on the calculation methodology which began in January.
Differences in compensation or assistance payments for men and women can arise because of differences in the calculation of guaranteed minimum pensions (GMPs) - primarily brought about by different retirement ages. In 2008, the PPF confirmed that it has to take account of GMPs to ensure the equal treatment of men and women that is required by law.
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