PPF launches next three-year Strategy as it marks 20 years of protecting DB pensions

The Pension Protection Fund (PPF) has set out its key strategic priorities in its Strategy for the next three years (2025-28) in the same week as it marks its 20th anniversary.  

Before the PPF came into operation in April 2005, there was inadequate protection for occupational defined benefit (DB) pensions. In the event of employer insolvency, people could lose their jobs and their pensions. Established by the Pensions Act 2004, the PPF was set up to protect the millions of DB pension scheme members in the UK. When sponsoring employers fail and their pension schemes are underfunded, the PPF steps in to pay compensation on members’ lost pensions.  

Over the past 20 years, it has transferred more than 2,000 pension schemes to the PPF and Financial Assistance Scheme (FAS), including schemes associated with household names such as MG Rover, Woolworths, Toys R Us, and Carillion. Since its inception, over half a million PPF and FAS members have been financially better off from receiving compensation paid by the PPF. To date, it has paid out over £10bn in compensation payments to members.  

Today, the PPF stands alongside the largest pension funds in the UK. It has £32bn in assets under management, of which nearly half is invested in the UK. The PPF is in a strong financial position, enabling it to significantly reduce its levy whilst maintaining security for the 400,000 PPF and FAS members it currently serves. With 5,000 remaining DB schemes with nearly 9 million members, the PPF continues to act as the ultimate ‘backstop’ for around £1tr in liabilities.  

Kate Jones, Chair of the PPF, said: “We’re proud of the protection we’ve provided for millions of people’s pensions over the past 20 years. With pensions policy back in the spotlight, it’s an apt time to reflect on the success story that is the PPF. The environment today is fundamentally different to 20 years ago and we stand today as a financially and operationally mature organisation looking to the future with confidence. We will continue to work with our partners in government and industry so we can deliver the best possible outcomes for our members, levy payers, and the wider pensions industry, in our next phase.” 

In its next three-year Strategy, the PPF sets out its goals to: act in the interests of those it protects; adapt and evolve; build on its strong foundations; and help shape positive change in the pensions industry.   

The PPF recognises that stakeholders want to see progress on the legislation governing its levy and levels of indexation it pays. While legislative change is ultimately for government, the PPF recognises that the time is right for a review in a number of key areas of the PPF’s governing legislation. The PPF has affirmed its intent to proactively help identify the right approach in the interests of members and levy payers, and to act quickly and effectively to implement any changes.  

The PPF additionally will further evolve how it operates to deliver continued customer service excellence and strong investment performance whilst ensuring it runs efficiently. With the PPF’s enduring role and operational maturity, it will continue to work in partnership with government and industry to consider how it can help give people greater financial security in retirement, both for the members of schemes it protects and more widely.    

Michelle Ostermann, Chief Executive Officer of the PPF, commented: “As we build on the strength of our first two decades, the expertise, operational excellence, and reputation we’ve built up puts us in a unique position to make a real difference. Our commitment to deliver for our members, our future potential members – for whom we hold significant reserves to backstop the entirety of the industry – and our levy payers remains unwavering. We look forward to the next phase of our journey and to continuing to work with our government and industry partners to make a meaningful contribution in the UK pensions landscape.”