Sponsoring Employers and Trustees of defined benefit (DB)
pension schemes may need to act quickly to get new forms of Pension
Protection Fund (PPF) contingent asset agreements in place by 29
March 2019.
The PPF is the lifeboat scheme set up to support members of DB
pension schemes whose employers become insolvent. The levy that DB
schemes pay to fund the PPF can be mitigated by the use of
contingent assets (guarantees, charges and letters of credit) which
have to be in the PPF required form.
The PPF published new forms of contingent asset agreements in
January 2018. For contingent asset agreements entered into or
re-executed on or after 18 January 2018, the new standard forms had
to be used. Existing agreements for contingent assets entered into
before that date could still be re-certified as usual in the last
PPF levy year 2018/19.
