Three of the company’s defined benefit plans had a combined deficit of £210 million ($382 million) and about 6,000 participants when Heath Lambert asked the PPF for relief in May, according to a Business Insurance report. The report notes that the PPF has approved the plans for its assessment period, which could be a year or more and then they may be taken over by the guaranty fund.
The PPF guarantees 100% of benefits to members already in receipt of a pension, and 90% of benefits owed to members still working, up to an annual limit of £25,000 ($45,500), said the report. During the assessment period the PPF decides whether the company can continue to maintain the plans and provide benefits that are at least equal to the fund’s guarantees.
The Fund’s intent was for insuring employee benefits for companies with underfunded plans, but it will take over plans if the company can prove that it risks insolvency otherwise. The fund is the UK’s equivalent to the Pension Benefit Guaranty Cocrporation (See Britain’s Answer to PBGC Opens for Business ) .
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