However, the government has a number of procedures and regulations in place to ensure that, in the worst case scenario, your pension is protected. Press: press@pensionbee.com As long as your provider is solvent, you should be fine. The maximum guaranteed benefit from the PBGC is defined based on the age you start drawing your pension. There is a statutory “lifeboat scheme” known as the Pension Protection Fund (PPF) which underpins DB pensions. If your pension qualifies as a ‘contract of long-term insurance’ it will be 100% covered by the Financial Services Compensation Scheme (FSCS). The fund applies to defined benefit schemes and the defined-benefit part of hybrid pensions, which also contains defined contribution and money purchase pensions. Trustees - a group that manages a pension scheme - were legally obliged to transfer the pension benefits to an insurance company through a 'buy-out'. It’s a worrying time for anyone when their company enters administration, especially those paying into or receiving a Defined Benefit company pension scheme. However, you can make a claim on the Financial Services Compensation Scheme if your pension company goes bust and is authorised by the City watchdog the Financial Conduct Authority. These insurers have huge amounts of surplus capital which should help prevent them going bust. In recent years, a number of big-name companies have gone bankrupt, plunging thousands of employees' livelihoods and, crucially, their retirement savings into turmoil. FCA Reference Number: 744931. Your first step is to find out whether you have been enrolled on a defined contribution scheme or a … There is a 'compensation cap' that limits the amount of pension you can get from the Pension Protection Fund annually. Your pension will rise with inflation each year until you reach your schemes retirement age. At the point it becomes clear the employer and final salary scheme are in trouble the Pension Protection Fund will go through an assessment period which could take up to two years. This means that if something happens to one of our money managers, who are BlackRock, State Street Global Advisors, Legal & General and HSBC, your pension will be protected by the FSCS up to 100%. You’re usually protected by the Pension Protection Fund if your employer goes bust and cannot pay your pension. With pensions, your capital is at risk. How will I know if my scheme is protected by the Pension Protection Fund? We’ll also pursue any compensation on behalf of our customers. So if you have a pension in a company that went bust prior to that, you may have lost some or all of your pension. Set up by the government more than a decade ago, the Fund takes over the pension schemes of insolvent companies to ensure workers still get some of their pension. Compensation increases annually in line with inflation between the time your former employer went bust, and the date your pension comes into payment. We use cookies to allow us and selected partners to improve your experience and our advertising. In the event your annuity provider goes under and no other company is willing to take over their books, then protection is provided through the Financial Services Compensation Scheme. Your money will be held on your behalf by the Trustee of The People’s Pension. Pensions are very valuable and it’s only right that if you put your savings in them you can be confident about your money being safe - and that you’ll receive the correct benefits.There are many different regulations that pension schemes and employers have to conform to, to make sure that your pension … Funding for the Pension Protection Fund is provided by a combination of: Can I take my pension early if it's in the Pension Protection Fun? This is because defined contribution and money purchase schemes - which see you pension savings invested on the stock market to grow in a big pot - aren't run by employers. If your pension provider goes bust, the compensation you’re entitled to will be determined by the type of pension you have, and whether your provider’s regulated by the Financial Conduct Authority (FCA). If you haven't reached retirement age yet, or you retired early, you'll get 90% of your pension in the Pension Protection Fund. If your employer goes into liquidation, your first concerns may well be focused on the immediate future, however, you should also give consideration to how this may affect your workplace pension. Therefore it’s important to diversify your investment portfolio, so your whole portfolio isn’t wiped out if your company goes down the toilet. How safe is my annuity? The only way this could happen is if you made a request to do so, which was accepted in writing by your pension scheme and you had selected a new pension to place your money before your scheme applied for the Fund. Find out more about cookies. The Pension Protection Fund will usually pay 100% level of compensation, meaning that you shouldn't lose any of your pension. "Some people think if their company goes bankrupt, they lose their pension," he says. Still have the pension Protection Fund UK team 020 3457 8444, Monday-Wednesday 9:30am-6pmThursday-Friday 9:30am-5pm you start drawing your comes. M not drawing it yet schemes retirement age PensionBee Ltd. company registration: 9354862 be safeguarded by Financial. The provider went bust on or after 6 April 2005 lifeboat scheme ” known as the pension scheme cover! Bust your money is held separately and won ’ t be available to your pension increases by year. 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