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What is the PPF?
The Pension Protection Fund is funded through members of the scheme (Visteon
UK Fund is a member) and provides compensation when the supporting
employer becomes insolvent and there are insufficient assets in the
pension scheme to cover the fund’s commitments. The PPF however
is not a Government funded organization, and compensation benefits
can change over time
For the PPF to take over the Visteon UK Pension Fund, certain criteria
need to be met. The evaluation of these criteria is known as the “Assessment
Period”. For our fund, this period commenced on March 31, 2009
and from this time members of the fund will be compensated in line with
PPF guidelines. Announcement 3 from the trustee of the fund, indicates
the dates that you will be impacted, and how the over payment since March
31 (inc. recovery of the April 1 increase) will be recovered.
General Implications
Here are some of the general implications of our fund entering the PPF:
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April 1, 2009 Increase – this will be removed
and recovered for all members |
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NPA -- The Normal Pension Age has been confirmed as 65, which means
that all members below that age (retired or deferred) will have an
automatic 10% reduction in compensation (after the application of
any other factors such as capping or early retirement) |
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Future increases – for anyone drawing a pension, these are
capped at a maximum of 2.5% and are only applied to any pension contributions
from 1997 onwards. This has significant implications for those with
pensionable service prior to this date, which does not receive any
increases. Prior to drawing pension you will receive increases on
the whole pension at RPI rate (capped at 5% max) |
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Pension Capping – the PPF limits your pension if you are
under NPA (65) on March 31, 2009. If you are over NPA at this date
or retired on medical grounds, your current pension will be unchanged
(except for April 1, and future increases shown above) |
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Surviving Spouse – will get 50% of the benefit, but at PPF
levels of compensation. |
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State Pension – you will receive this at NPA under current
PPF rules |
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Anyone retiring early from March 31, 2009 will be reduced by an “early
retirement factor” |
Overpayment recovery period
After discussion with the Trustee and subsequent approval by the PPF
it has been agreed that the recovery period for pension overpayments made
since 31st March 2009 can be extended if requested by individual members.
Depending on the individual amount of pension reduction / month the period
will be extended to between 12 to 36 months (was 3 - 12 months).
Next steps: Once you know your payback period, this will be advised to
you by the Plan administrator Xafinity Paymaster in due course, and you
wish your payback period to be extended then contact administrator and
request extension. Please note that PPF may charge interest to any overpayments
remaining unpaid at end of assessment period.
Contact details:
Visteon Pensions
Xafinity Paymaster
Scotia House
Castle Business Park
Stirling FK9 4TZtel: 01786 434378
email: <VUK-Visteon@xafinitypaymaster.com>
If you are retired
We have attempted to give you a spreadsheet to estimate the impact to
you. Download PPF retiree calculator
Data you will need to know
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Your annual pension on March 31, 2009 |
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Your annual pension on April 1, 2009 (as this increase will be
recovered) |
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The percentage of your pension you took as a tax free lump sum
at retirement (this is required to see if you hit the total pension
cap level) |
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Number of years pensionable service before and after April 1997
(required to estimate future increases) |
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Your age at March 31, 2009 (the cap level is dependant on your
age) |
Note: If you took early retirement during the 3 years prior to
March 31, 2009 your benefits maybe be significantly impacted. The Trustee
is working with the PPF on the implications for this group of people.
If your pension is deferred (frozen)
We have attempted to give you a spreadsheet to estimate the impact to
you. Download PPF deferred calculator
Data you will need to know
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Estimated Pension Value at April 1 2009 (not front loaded)
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Your Age at March 31, 2009
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Total Years Pensionable Service
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Pensionable Years Service After April 1997
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Early Retirement Age
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Estimated Pension Value at March 31 2009
Note: Calculations are designed to give guidance only and individual
circumstances may vary.
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